JPMorgan boss: Cryptocurrency is a “scam”

Chris Lee

The boss of a leading bank has hit out at the concept of cryptocurrency by labelling it a “scam” and even said governments could find themselves forced to close down the alternative online payment methods.

CEO of JPMorgan Jamie Dimon made the comments over the weekend while he was speaking to the 25th Annual Summer Celebration Gala of the Aspen Institute, a leadership and idea think tank.

Bloomberg reported that Dimon also used his speech to predict that governments may be unable to control blockchain-powered currencies in the future.

It’s not the first time that Dimon, who has been CEO of JPMorgan since 2005, has hit out at cryptocurrencies.

In September of last year, he directly described Bitcoin as a “fraud”, although he did later express remorse for making this claim. By January, he told reporters he was unable to answer when his accusation of Bitcoin fraud was put to him again.

In October of last year, though, he switched tack and began attempting to downplay the importance of cryptocurrencies altogether.

“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,” he said.

Dimon has, however, drawn clear distinctions in the past between cryptocurrencies and the blockchain technology which powers it.

When asked about JPMorgan’s relationship with blockchain, he said that the bank was “testing it and will use it for a whole lot of things”.

His earlier comments are part of a large-scale perception among established banking sector leaders that cryptocurrency is ripe with fraudsters.

Earlier this year, the US Federal Reserve’s Chairman Jerome Powell told the US House of Representatives’ Financial Services Committee that cryptocurrencies had a number of “investor and consumer protection issues” and that they were frequently used for money laundering purposes.

He also said that cryptocurrencies were not useful as a method to accrue value. “If you think about what currencies do, they’re supposed to be a means of payment and a store of value basically and cryptocurrencies are not used very much in payment,” he said.

“And in terms of the store of value, if you look at the volatility it’s just not there,” he added.

Last year, the CEO of Goldman Sachs also levied the fraud accusations at Bitcoin when the famous cryptocurrency dropped in value.

“Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud,” he said at the time.

He also shared a less-than-optimistic view on the future of cryptocurrencies and predicted that they would collapse.

“Bitcoin is not for me. A lot of things that have not been for me in the past 20 years have worked out, but I am not guessing that this will work out,” he said.

However, the comments of bank leaders should perhaps not always be taken as a statement of their organisations’ intentions. Despite its CEO’s comments, for example, Goldman Sachs now plans to offer Bitcoin futures as part of the range of products it trades for its clients.


Chris Lee

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