Arthur Hayes: Forget about CRCL, buy JPMorgan! Stablecoins will drive bank stocks to soar 184%

Recently, the issuance of stablecoin issuer Circle's IPO had a big pump, becoming a regret for most who have not entered a position. However, BitMEX founder Arthur Hayes wants everyone to forget about CRCL and instead buy the too big to fail (TBTF) bank. He specifically mentioned JPMorgan, estimating that stablecoins could average a 184% increase in the stock price of TBTF banks.

JPMorgan launches JPMD, a stablecoin outpost

JP Morgan ( recently announced the launch of a deposit token program called JPMD, which is seen as a precursor to entering the stablecoin market. JPMD is based on the Base chain, which is a second layer ) system operated by Coinbase, built on Ethereum.

( JPMorgan Chase and Coinbase jointly launched the JPMD deposit token pilot program, with Base as the preferred testing option ).

Therefore, JPMorgan will have two types of deposits, namely regular deposits ( and JPMD stablecoin deposits.

正規存款 )regular deposits(

Regular deposits are still digital, but transferring them within the financial system requires outdated interbank systems to communicate with each other, along with a significant amount of manual oversight. The transfer time for regular deposits is Monday to Friday, from 9 AM to 4:30 PM. The yield on these deposits is minimal; the Federal Deposit Insurance Corporation )FDIC( estimates that the average yield on checking accounts is 0.07%, while the average yield on one-year time deposits is 1.62%.

JPMD stablecoin deposit

The other type is JPMD. JPMD is based on the Base public blockchain, and customers can use their JPMD around the clock (24/7, 365 days a year). According to legal regulations, JPMD cannot pay out profits, but Hayes believes that JPMorgan Chase will attract customers to convert their regular deposits into JPMD through other generous cash-back consumer incentives.

JPMD can reduce high compliance costs

Hayes believes that JPMD will be able to save on its high compliance costs.

According to statistics, these too big to fail banks spend $20 billion annually on operations and technology required for compliance with banking regulations. However, if everything is on the blockchain, with public addresses for querying, and encoded into rules that artificial intelligence agents can perfectly follow, ready to provide any reports requested by regulators in real-time, JPMorgan could effectively save on the high costs of compliance and operations.

JPMD can purchase high-yield US Treasury bonds

JPMorgan Chase's second reason for pushing JPMD is that it allows the bank to purchase billions of dollars worth of U.S. Treasury bonds risk-free using custodial stablecoin assets )AUC(. This is because the interest rate risk of U.S. Treasury bonds is close to zero, yet they can actually generate high returns close to the federal funds rate. Under the new SLR policy that the Federal Reserve is preparing to launch, TBTF banks will have a purchasing capacity of $5.5 trillion in Treasury bonds.

Note: The Federal Reserve recently decided to lower the banks' Supplementary Leverage Ratio ), SLR(. In the future, the capital requirements for banks holding U.S. Treasury bonds may be reduced or exempted.

Going long on TBTF bank, Arthur Hayes estimates that the stock price is expected to pump by 184%.

Hayes estimates that by taking the average price-to-earnings ratio of TBTF banks at 14.41 times, multiplied by cost savings and the net interest margin potential of stablecoins, it could add $3.91 trillion in market value. Currently, the market value of these eight TBTF banks is around $2.1 trillion, meaning that stablecoins could on average drive TBTF bank stock prices up by 184%.

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