JP Morgan Chase CEO Jamie Dimon informed lawmakers on Wednesday that bitcoin and different cryptocurrencies had been a "decentralized Ponzi scheme."
REUTERS
Jamie Dimon doubled down on his longstanding antagonism towards cryptocurrencies on Wednesday because the JPMorgan Chase CEO informed lawmakers that he seen bitcoin and different digital cash as “harmful” — likening them to a “decentralized Ponzi scheme.”
“I’m a significant skeptic of crypto tokens, which you name forex, like bitcoin,” Dimon mentioned throughout an look alongside different banking executives earlier than the Home Monetary Providers Committee on Wednesday.
“They're decentralized Ponzi schemes, and the notion that it’s good for anyone is unbelievable,” he mentioned.
Dimon mentioned that the unregulated crypto market makes it simpler for criminals to have interaction in illicit exercise equivalent to cash laundering, theft, and intercourse trafficking.
“It's harmful,” he mentioned.
Dimon, whose internet value has been pegged by Forbes at $1.4 billion, has repeatedly denigrated bitcoin and cryptocurrencies, calling them a “fraud” and “idiot’s gold.”
Final 12 months, he really helpful that traders put their assets into extra dependable belongings equivalent to dollars or gold. He additionally urged the federal government to step up regulation of the digital cash.
Dimon, who assailed Democrats for urging an finish to investments in oil and gasoline, mentioned on Wednesday that he would encourage his purchasers to put money into “stablecoins” which might be pegged to the greenback.
He touted JPMorgan’s use of blockchain in addition to the financial institution’s personal coin that may be exchanged for dollars at a hard and fast fee.
“It may be moved simply the way in which cryptocurrencies could be moved — steady worth, very low price,” Dimon informed lawmakers.
Dimon additionally sounded the alarm on Wednesday over the state of the US economic system, saying that Individuals had been getting “crushed” by report ranges of inflation.
Mainstream monetary giants on Wall Road have reluctantly come round to embracing cryptocurrency lately.
Final 12 months, Morgan Stanley turned the primary financial institution to let purchasers commerce crypto. It additionally began to speculate its personal cash within the risky belongings.
Morgan Stanley lengthy resisted dipping its toes into the crypto market, however senior bankers capitulated to strain from agitated purchasers keen to achieve entry to the digital currencies which on the time had been minting newfound millionaires seemingly in a single day.
In April, Goldman Sachs joined the fray when it started providing its first-ever lending facility backed by bitcoin.
The crypto markets are within the midst of a extreme downturn.
Bitcoin’s worth, which reached an all-time excessive of greater than $64,000 in November, has plummeted to south of $20,000. The market capitalization of cryptocurrencies has fallen by two-thirds throughout that interval — from a excessive of $2.8 trillion to simply $930 billion.
Dimon’s friends within the banking business informed lawmakers that their monetary establishments haven't any plans to finance crypto mining, the energy-intensive course of for growing the circulation of digital cash which has been blamed for exacerbating local weather change.
Citigroup CEO Jane Fraser, Financial institution of America boss Brian Moynihan, and Wells Fargo chief Charles Scharf all pledged to not again mining operations when quizzed by Rep. Brad Sherman (D-Cal.), a crypto mining skeptic.
Lawmakers within the Democrat-controlled Congress have urged regulators to tighten the screws on crypto mining operations.
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