JPMorgan boss says crypto tokens are ‘decentralised ponzi schemes’

Comments are the latest criticism of digital currencies by Jamie Dimon, who once called Bitcoin 'a fraud'

Jamie Dimon, chairman and chief executive of JPMorgan Chase, has been a vocal critic of Bitcoin. AFP
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Jamie Dimon didn’t mince words when a US politician mentioned the executive’s history of criticising cryptocurrencies.

“I’m a major sceptic on crypto tokens, which you call currency, like Bitcoin,” the JPMorgan Chase chief executive said in congressional testimony on Wednesday. “They are decentralised Ponzi schemes.”

Stablecoins — digital assets tied to the value of the US dollar or other currencies — would not be problematic with proper regulation, and JPMorgan is active in blockchain, Mr Dimon said.

The comments are the latest criticism of digital currencies by Mr Dimon, who once called Bitcoin “a fraud” before eventually saying he regretted the comments.

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 bill, it would be illegal to issue or create new “endogenously collateralised stablecoins” such as those similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year, according to a copy obtained by Bloomberg.

While Mr Dimon has been a vocal critic of Bitcoin, the company has been focused on using blockchain for financial services. JPMorgan uses its custom blockchain and token, JPM Coin, to conduct intraday repurchase agreements, which allows other financial institutions to take out short-term loans using high-quality collateral.

JPMorgan was also the first Wall Street bank to launch a presence in the metaverse in February.

Mr Dimon called Bitcoin a fraud in 2017. In October, he said it was worthless but that he would follow clients and recently acknowledged that decentralised finance — where banks are replaced by algorithms — is “real”.

Updated: September 22, 2022, 7:49 AM
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