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JP Morgan CEO Calls Bitcoin a Decentralized Ponzi Scheme

Jamie Dimon – CEO of JP Morgan Chase – had more unkind words for the digital asset market on Wednesday. 

The bank executive called cryptocurrencies such as Bitcoin “decentralized ponzi schemes,” and suggested that they aren’t currencies at all. 

Banker VS Bitcoin

During congressional testimony, the CEO reiterated his historically anti-crypto stance after it was mentioned by a lawmaker. 

“I’m a major skeptic on crypto tokens, which you call currency, like Bitcoin,” said Dimon. “They are decentralized Ponzi schemes.”

JPMorgan Jamie Dimon's 'Bad for America' Line Is a Timely Warning for Fed - Bloomberg
Jamie Dimon. Source: Bloomberg

That said, the CEO acknowledged how stablecoins – cryptocurrencies value-pegged to fiat currency – may not be as problematic with proper regulation. 

At present, the House Financial Service Committee is organizing a bill to regulate stablecoins. Its current installment would ban “endogenously collateralized stablecoins” like TerraUSD – a decentralized model that fell apart in May. 

He added that JP Morgan is currently working on blockchain technology, through products like their custom blockchain token JPM Coin. The token gives financial institutions access to short-term loans using high-quality collateral. 

However, offering blockchain services isn’t the same as supporting Bitcoin, or other decentralized cryptos. Dimon said he wouldn’t personally care for the top digital asset – even if it reached ten times its price from September of 2021. 

“I don’t know if it’s an asset. And, I don’t know if it’s foreign exchange. I don’t know if it’s a currency… I have no idea, and I don’t personally care,” he said at the time. 

Franklin CEO Jenny Johnson offered a similar opinion last month. While recognizing that blockchain technology offered efficiency and security benefits for financial companies, she said Bitcoin was “more like a religion.”

JP Morgan’s Stance

Last year, JP Morgan gave its financial advisors permission to offer wealth management clients access to cryptocurrency funds. It has since written various research reports and analyses about Bitcoin and the crypto market, from price predictions to fundamentals

Its commentary is oftentimes bullish compared to that of its CEO. In September, the banking giant said that investors were preferring Bitcoin over gold as an inflation hedge. It even joined the Metaverse – securing a spot in the metaverse real-estate game “Decentraland.”

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That said, company clients may not feel the same. In January, just 5% of clients predicted that Bitcoin would reach $100,000 by the year’s end. Meanwhile, 23% thought it would decline back to $20,000 – which proved to be correct. 

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