JPMorgan Chase Chief Financial Officer Jeremy Barnum said stablecoins may evolve into a form of regulatory arbitrage if new rules fail to align them with traditional banking standards.

Speaking on the bank’s first-quarter earnings call on Tuesday, Barnum framed the debate less as a technology shift and more as a question of oversight. Some stablecoin models could replicate bank-like products while avoiding the safeguards applied to deposits, including rules around interest payments and customer protections, he said.

“If the same product isn’t regulated the same way, you open the door to arbitrage,” Barnum said, pointing to structures that offer rewards resembling yield. In that scenario, he added, firms could “run a bank” without being subject to core banking regulations.

The comments come as lawmakers weigh new frameworks for digital assets. The proposed Clarity Act aims to define how crypto markets are split between regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission. It also reflects broader efforts to establish clearer rules for stablecoins and related products.

The debate also extends to whether issuers of stablecoins, crypto tokens whose value is pegged to a traditional asset, mostly the dollar, should be allowed to offer yield to users.

Some crypto firms, including Coinbase (COIN), have pushed for the ability to pass interest earned on reserve assets to coin holders, arguing it would make stablecoins more useful as savings tools.

Banks have pushed back, saying yield-bearing stablecoins begin to resemble deposits without the same capital, liquidity and consumer protection requirements. In their view, that creates an uneven playing field, allowing non-bank firms to attract funds by offering returns regulated banks are restricted from providing.

The issue has become a central point of tension in Washington D.C., as policymakers weigh how to prevent stablecoins from functioning as bank-like products outside the traditional regulatory perimeter.

Barnum said JPMorgan supports the push for clarity, but stressed that consistency matters more than speed. Without it, he warned, new entrants could gain an advantage by operating outside existing regulatory boundaries.

He downplayed the idea that stablecoins will disrupt the bank’s core payments business. JPMorgan already runs a large wholesale payments network that processes transactions at low cost and high speed, leaving little room for margin-driven disruption.

Instead, the bank is integrating similar technology into its own systems. Through its blockchain unit, Kinexys, JPMorgan has developed tools such as JPM Coin and tokenized deposits, which allow institutional clients to move money around the clock and automate transactions.

Barnum described these efforts as part of a broader modernization strategy. Features often associated with stablecoins, such as programmable payments, are already being built into existing infrastructure rather than replacing it.

On the consumer side, he said stablecoins are often framed as “digital cash,” but still face familiar compliance hurdles, including identity checks.

JPMorgan reported stronger-than-expected first-quarter results, driven by a rebound in trading and investment banking. Net income rose 13% year over year to $16.49 billion, while revenue climbed 10% to $50.54 billion. The bank set aside less for potential loan losses than expected, signaling stable credit conditions among borrowers.

Boundless, a zero-knowledge (ZK) proving network originally launched by RISC Zero, has integrated with the XRP Ledger (XRPL), bringing native ZK proof verification to the Layer 1 blockchain for the first time.

The integration is designed to enable institutions to build financial applications on XRPL that can execute privately while maintaining regulatory compliance, according to the announcement.

XRPL is a public, open-source blockchain built for payments and tokenized finance. The network has attracted more than $550 million in ecosystem funding and counts SBI Holdings, Zand Bank, Archax, and Guggenheim Treasury Services among its institutional users.

Despite the institutional foothold, on-chain transparency has remained a barrier to deeper adoption. Transaction flows, treasury strategies, and counterparty relationships are visible by default on public ledgers, creating competitive risks and compliance friction. Ripple CTO David Schwartz acknowledged as much last year, noting that even Ripple itself could not use the XRPL DEX for payments due to compliance constraints around anonymous liquidity providers.

Emiliano Bonassi, VP of Engineering at Boundless, said the integration covers use cases from stablecoin payments to DeFi flows.

“Boundless brings scalable confidential compute directly to the XRPL ecosystem,” Bonassi told The Defiant. “Institutions can settle on XRPL with ZK proofs and cryptographic attestations for compliance and privacy-preserving logic, such as sanction screening to KYC/KYT/KYB. No trust assumptions, no data exposure, and full control over what gets disclosed and to whom.”

The privacy layer arrives as XRPL continues to expand its institutional network. Ripple teased major XRPL upgrades in February aimed at broadening XRP’s utility beyond payments into stablecoin settlement, tokenized assets, and lending. In November, Ripple partnered with Mastercard and WebBank to test RLUSD stablecoin card settlements on XRPL. And the network’s real-world asset push has accelerated, with Argentina’s YPF Luz launching an energy tokenization platform carrying over $800 million in tokenized assets on the ledger.

“XRPL has always been built for institutional finance. With Boundless, we are making confidential, compliant execution native infrastructure on XRPL, unlocking a new category of enterprise use cases,” said Odelia Torteman, Director of Corporate Adoption at XRPL Commons.

The integration reflects a broader industry shift toward privacy-first architecture powered by zero-knowledge proofs. At Ethereum’s DevConnect conference in Buenos Aires last November, ZK tooling emerged as a dominant theme, with Boundless among the projects highlighted for its work on ZK-powered cross-chain infrastructure. Proof systems have matured from experimental cryptography to what builders now consider core infrastructure for the next phase of institutional DeFi.

This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.

Bitcoin BTC$74,360.44 touched $75,900 in mid-morning U.S. trading hours on Tuesday, marking its highest level since before February 5, when the price crashed down to $60,000.

Optimism about developments in the Iran war is sparking solid gains across risk assets and continued declines in oil prices. The Nasdaq was ahead 1.2% and WTI crude was lower by 6% to $93 per barrel.

Crypto-related stocks were higher across the board as well. Strategy (MSTR) was up 7.6, Coinbase (COIN) 6.2%, Circle (CRCL) 11% and Galaxy Digital (GLXY) 8.3%.

Bitcoin miners — most of which have altered their business plans to focus on AI-related data center buildouts — were also making large upside moves, led by the former Bitfarms, now Keel Infrastructure (KEEL), which was up 20.5%. MARA Holdings (MARA) was ahead 5.8% and Hut 8 (HUT) 4.8%.

The broader macro backdrop has also turned more supportive. With the Nasdaq reaching its highest level since early February, ether (ETH) also outperformed bitcoin, underscoring the risk-on tone across markets, said Joel Kruger, market strategist at LMAX Group.

“Overall, the past 24 hours reflect a market that is beginning to show signs of re-engagement,” Kruger said, pointing to improving technicals and broader participation.

The next test for the crypto rally comes at current levels. Kruger said the $76,000 level for bitcoin, where the mid-March rebound rolled over, is a key resistance.

A decisive move above — alongside sustained strength in ether (ETH), the second-largest cryptocurrency — would be key in determining whether the rebound can evolve into a more durable bullish trend, he said.

The Ethereum Foundation is doubling down on one of the ecosystem’s most critical needs: security.

On Tuesday, the organization unveiled a new initiative aimed at tackling a persistent challenge in crypto development—the high cost of smart contract security audits.

Through its “Audit Subsidy Program,” the foundation is partnering with leading audit providers and ecosystem firms to make professional security reviews more accessible to builders.

Backed by a $1 million subsidy pool, the program is designed to lower financial barriers that have historically prevented many teams from undergoing comprehensive audits, despite their importance as an industry best practice.

The initiative is part of the foundation’s broader Trillion Dollar Security Initiative, which focuses on strengthening Ethereum as it scales to support increasingly complex applications and larger amounts of value on-chain.

The program includes partners such as Nethermind, Chainlink Labs and Areta, and connects builders with more than 20 top-tier audit firms, helping streamline access to trusted security expertise across the ecosystem.

Alongside the rollout, the foundation also introduced a new framework it calls the “CROPS principles,” short for censorship resistance, open source, privacy and security. The framework is intended to guide how applications are built and evaluated across the Ethereum ecosystem.

Builders can submit their projects for consideration, after which an expert committee reviews applications. Selected teams receive subsidies that can be applied directly to audit services through Areta’s platform. The program is open to all Ethereum mainnet builders, regardless of size or stage.

“The subsidy program makes audits accessible and strengthens the Ethereum ecosystem,” the foundation wrote on X.

Read more: Ethereum Foundation publishes new mandate defining its role, core principles

The U.S. Securities and Exchange Commission on Tuesday approved FINRA’s proposed rule change eliminating the Pattern Day Trader designation, the $25,000 minimum equity requirement, and all related day-trading buying power provisions under FINRA Rule 4210. The accelerated approval removes longstanding restrictions that have governed retail day trading for decades.

The SEC simultaneously approved new intraday margin standards requiring broker-dealers to monitor and address real-time risk exposure in customer margin accounts. The regulatory shift represents a substantial change to day-trading accessibility and compliance frameworks for retail investors in U.S. equity markets.

Sources: WatcherGuru | WatcherGuru

This article was generated automatically by The Defiant’s AI news system from publicly available sources.

Paxos Labs has raised $12 million in a strategic funding round led by Blockchain Capital to expand its Amplify platform, a suite of tools that lets companies offer crypto yield, lending and stablecoin issuance through a single integration.

The Amplify suite includes three modules — Earn, Borrow and Mint — allowing platforms to generate yield on digital assets, enable crypto-backed loans and issue branded stablecoins with a single integration designed to unlock additional features over time.

According to Tuesday’s announcement, the platform provides a single SDK with configurable controls, while Paxos Labs manages liquidity, counterparty vetting and backend operations, and shares a portion of generated revenue with integrating partners.

The company said partners including Aleo, Hyperbeat and Toku are already using the platform, with Hyperbeat reporting more than $510,000 in assets under management since launching on April 9. The raise also included participation from Robot Ventures, Maelstrom and Uniswap.