JPMorgan Boss Says Crypto Tokens Are ‘Decentralized Ponzi Schemes’

JP Morgan Chase chief executive Jamie Dimon did not hold back in his criticism of cryptocurrencies. When a U.S. politician mentioned Dimon’s history of criticizing crypto during a congressional hearing, Dimon agreed that he is a “major skeptic” on crypto. 

“I’m a major skeptic on crypto tokens, which you call currency, like Bitcoin,” the JP Morgan Chase chief executive said. 

“They are decentralized Ponzi schemes,” Dimon said. 

The CEOs of the biggest U.S. retail banks, including JP Morgan Chase’s Dimon and Wells Fargo’s Charlie Scharf, testified before the Democrat-led House Financial Services Committee. The hearing was called “Holding Megabanks Accountable: Oversight of America’s Largest Consumer Facing Banks”. 

Stablecoins, which are digital assets tied to the value of the U.S. dollar or other currencies, would not be problematic with proper regulation, Dimon said. He also said that JPMorgan is active in blockchain, which the company uses for financial services. 

JP Morgan uses a custom blockchain and a token called “JPM Coin” to conduct intraday repurchase agreements, which allows other financial institutions to take out short-term loans using high-quality collateral. 

The comments are only the latest criticism of digital currencies by Dimon. 

The chief executive of JP Morgan once called Bitcoin “a fraud,” back in 2017. Eventually, he said that he regretted the comments. In October 2021, he said that Bitcoin was worthless but that he would follow clients. Recently, he acknowledged that decentralized finance — where banks are replaced by algorithms — is “real”.

House financial services committee chairwoman Maxine Waters and ranking member Patrick McHenry have been working to reach an agreement on stablecoin legislation.

Under the latest version of the stablecoin bill, it would be illegal to issue or create new “endogenously collateralized stablecoins” such as those similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year. 

Earlier this week, JP Morgan Chase & Co.’s global head of payments Takis Georgakopoulos said that demand for cryptocurrencies as a payment method has seen a drastic decline in the past six months.

Be the first to comment

Leave a Reply

Your email address will not be published.