JPMorgan Chase & Co. (JPM (JPM)) said Monday it supports a regulatory framework for cryptocurrencies—but with a big caveat. The bank warned that rules without proper safeguards could create new risks, especially around stablecoins and yield-bearing products.

In a blog post by Umar Farooq, global co-head of JPMorgan Payments, and Peter Muriungi, CEO of Digital Assets and Blockchain Solutions, the bank argued that the U.S. should tread carefully while setting up a framework for digital assets.

“Financial innovation that outpaces regulation and risk management can lead to instability that hinders progress,” the blog read. “That’s why regulatory clarity matters only if paired with durable safeguards.”

The bank argued that payments innovation—such as stablecoins—could shift into “shadow-banking” activities, offering yield-like incentives or balance-holding arrangements without the necessary safeguards.

“When consumers are offered ‘rewards’ or ‘cashback’ simply for holding balances, many reasonably assume the product carries familiar safeguards. If it does not, the result is not just consumer confusion,” the executives said.

JPMorgan emphasized the importance of closing these gaps to prevent the recreation of vulnerabilities that financial regulation aims to prevent. It also stressed the need to ensure that digital markets do not become “blind spots” for illegal activities.

“The goal should not be simply to move fast, but to build a system that Americans can trust,” the banking giant noted.

JPMorgan’s blog comes in the wake of an increasingly public disagreement over provisions in cryptocurrency legislation, i.e., the Clarity Act, that could allow cryptocurrency companies to offer rewards on stablecoin holdings.

JPMorgan CEO Jamie Dimon argues that the structure would create direct competition with banks without imposing equivalent safeguards, warning lawmakers to move cautiously on the clause. He also argued the legislation’s anti-money laundering and Bank Secrecy Act provisions do not go far enough.

Cryptocurrency executives have argued that lawmakers—not financial institutions—should determine the future framework for cryptocurrency in the U.S.

Interestingly, longtime Bitcoin (BTC) critic Peter Schiff also criticized Dimon’s push to treat cryptocurrency firms offering interest-bearing products as traditional banks.

The Clarity Act—a proposed legislation designed to establish a regulatory framework for cryptocurrencies—cleared the Senate Banking Committee last month. Some Democratic Senators broke ranks to vote in favor alongside all Republican members.

The bill officially sits on the Senate Legislative Calendar as of this writing, making it eligible for a full floor vote.

Price Action: JPMorgan shares rose 0.04% in after-hours trading after closing 0.10% higher at $329.39 during Monday’s regular trading session. Year-to-date, the stock has gained 2.23%.

JPM’s stock shows strength across short-, medium-, and long-term trends and has a moderately high Growth score in market data rankings.