October 1, 2022

Cryptocurrencies are harmful “Ponzi schemes” that put billions of {dollars} in danger yearly, JPMorgan CEO Jamie Dimon stated in a scathing evaluate of risky digital belongings.

Testifying in Congress on Wednesday, Dimon described himself as a “large skeptic” about cryptocurrencies like bitcoin.

“These are decentralized Ponzi schemes and the concept that is good for everybody is unbelievable,” he informed lawmakers, calling Bitcoin and different cryptocurrencies “harmful.”

Bitcoin, which hovered simply above $19,000 at 6:45 a.m. ET Thursday, misplaced greater than half its worth in 2022 as cryptocurrencies throughout the board skilled a large sell-off that grew to become often called the “crypto winter.”

dwelling assembly

The US Home Committee on Monetary Companies held a listening to on Wednesday at which representatives of main US banks, together with Citigroup, Financial institution of America and Wells Fargo, testified. Committee Chair Maxine Waters and Rating Member Patrick McHenry are at the moment drafting a invoice to control stablecoins, a category of digital belongings which are pegged to the worth of an asset just like the US greenback.

Below the newest draft laws seen by Bloomberg, it will be unlawful to challenge or create new “endogenously backed stablecoins” like TerraUSD, which collapsed earlier this yr in one of many greatest crypto bankruptcies ever.

Dimon stated in his testimony to the Home of Representatives on Wednesday that billions of {dollars} are misplaced yearly to cryptocurrencies, noting their hyperlinks to cash laundering, ransomware, intercourse trafficking and theft.

Nonetheless, he argued that stablecoins wouldn’t be as problematic in the event that they had been correctly regulated.

Bitcoin is “nugatory”

The top of JPMorgan has lengthy been a vocal critic of bitcoin and different decentralized digital belongings and has refused to name them currencies.

Final October, as the worth of Bitcoin approached an all-time excessive, Dimon stated the cryptocurrency was “nugatory.”

Again in 2017, he known as Bitcoin a “rip-off,” a declare he later stated he regretted. Nonetheless, final yr he doubled down on his distaste for the asset, saying that he’s “not a supporter of bitcoin” and “has little interest in it.”

JPMorgan itself has not been as crucial of bitcoin, with the financial institution saying again in Might that it sees “important upside” for crypto traders. Nonetheless, the lender’s head of funds stated this week that whereas the cryptocurrency had a “area of interest use case,” the demand for tokens as a fee methodology has declined sharply over the previous six months.

The agency, and Dimon himself, have additionally supported Blockchain expertise, which is the spine of cryptocurrencies like Bitcoin.

In 2019, JPMorgan grew to become the primary US financial institution to create and efficiently take a look at a digital coin that represents a fiat forex – on this case, the US greenback. Blockchain-backed JPM Coin is utilized by the financial institution to execute intraday repurchase agreements.

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