In a news report by Bloomberg on Sunday, 5th of August, Jamie Dimon, CEO of JP Morgan Chase, termed cryptocurrency as a scam. This was followed by him saying that blockchain on the other hand is real and is being tested for many things.
Jamie spoke at Aspen Institute’s 25th annual summer celebration gala on Saturday in which he included cryptocurrency as part of general comments about the U.S. economic outlook. He called cryptocurrencies a “scam”, also expressing that he had “no interest” in bitcoin. He also suggested that since the cryptocurrencies are uncontrollable, governments may make a move to shut them down.
The CEO of one of the largest investment banks of the world, JP Morgan Chase, has remained a critic about cryptocurencies since a long time. Last year in September, the media caught fire when Dimon termed bitcoin as “fraud”, also mentioning that it will soon end. Although Dimon later on said that he “regretted” his choice of words, however, his stance on bitcoin and cryptocurrencies has remained the same.
In later occurrences, Dimon has also stated regarding cryptocurrencies:
I wouldn’t put this high on the category of important things in the world. But I’m not going to talk about bitcoin anymore,
Prior to the statement, Dimon has indeed remained silent about cryptocurrencies and has refrained to comment on it, when pushed. In January 2018 he declined to answer, when asked about how he felt about the moving market (the value of bitcoin dropped after Jamie Dimon’s hard comment) with his bitcoin “fraud” comments.
Harvard Business Review held an interview with Jamie Dimon, where he was asked about his views on cryptocurrency, to which Dimon compared them with fiat currencies implying that cryptocurrencies cannot replace fiat currencies.
HBR: What’s your view on cryptocurrency? A few months ago you said you thought bitcoin was a fraud and that you’d fire any trader dealing in it.
Jamie Dimon: I probably shouldn’t say any more about cryptocurrency. But it’s not the same as gold or fiat currencies. Those are supported by law, police, courts. They’re not replicable, and there are strictures on them. Blockchain, on the other hand, is real. We’re testing it and will use it for a whole lot of things.
In a question in which Dimon was asked about his competitive threat, Dimon replied:
“The biggest potential disruption to our business is new forms of payment. You have PayPal, Venmo, Alipay, and more. These companies are doing a good job of embedding basic banking services in their chats, their social, their shopping experience.”
However, in JP Morgan’s annual report of 2017 to SEC (Securities and Exchange Commission), the bank mentioned cryptocurrencies under the “Competition” subsection, when describing how new competitors have emerged that threaten J.P. Morgan’s operations.
Although Dimon remain critical about cryptocurrencies, his views regarding the technology that powers it, i.e. blockchain are much more positive. JP Morgan Chase is embracing the new technology and exploring new ways in which it can be used. In the Harvard Business Review interview, Dimon described blockchian as “real” (compared to cryptocurrencies) and said “We’re testing it and will use it for a whole lot of things.”
JP Morgan is also using the Distributed Ledger Technology; on its website, and describes its mandate to be:
“The Blockchain Center of Excellence (BCOE) leads efforts for applications of distributed ledger technology (DLT) within J.P. Morgan. We are exploring blockchain use cases and piloting solutions across business lines. We are active in the blockchain ecosystem: developing technology, investing in strategic partnerships, and participating in cross-industry consortia.”
Another of JP Morgan’s blockchain project is Quorum, which is an enterprise focused, blockchain infrastructure designed for financial use cases specifically for smart contracts. Quorum was meant to be an open source blockchain platform designed to limit the access of a blockchain transaction to certain participants in the network. Although, not decentralized, Quorum offers transaction and contract privacy.