The harsh definition of the president of a major Wall Street bank: Bitcoin is a “decentralized Ponzi scheme”

JPMorgan Chase Chairman Jamie Dimon at a US congressional committee hearing REUTERS/Elizabeth Frantz
JPMorgan Chase Chairman Jamie Dimon at a US congressional committee hearing REUTERS/Elizabeth Frantz

JP Morgan Chairman Jamie Dimon has spoken critically of Bitcoin and other cryptocurrencies when asked for his opinion at a US congressional hearing.

“I’m a big skeptic of crypto tokens, which they call currency, like bitcoin,” the JPMorgan Chase & Co. chief executive said in his testimony to Congress on Wednesday. “They are decentralized Ponzi schemes”.

Stablecoins, or stable cryptocurrencies — which are digital assets pegged to the value of the US dollar or other currencies — would not be problematic with proper regulation, and JPMorgan is active in terms of blockchain, Dimon said.

The comments are the latest criticism leveled against digital currencies by Dimon, who once called bitcoin “a fraud” before finally indicating he regretted the comments.

The chair of the House Financial Services Committee, Maxine Waters, Y Patrick McHenry they have been working to reach an agreement on legislation for stable cryptocurrencies. Under the latest version of the bill, it would be illegal to issue or create new “endogenously collateralized stablecoins” like those similar to terraUSD, the algorithmic stablecoin that crashed earlier this year, according to a copy obtained by Bloomberg.

While Dimon has been a vocal critic of bitcoin, the company has focused on the use of blockchain for financial services. JPMorgan uses its custom blockchain and token, JPM Coin, to conduct intraday repurchase agreements, allowing other financial institutions to obtain short-term loans using high-quality collateral. JPMorgan was also the first Wall Street bank to launch a presence in the metaverse in February.

Strong criticism of the CEO of JP Morgan on cryptocurrencies REUTERS/Dado Ruvic/Illustration/File Photo
Strong criticism of the CEO of JP Morgan on cryptocurrencies REUTERS/Dado Ruvic/Illustration/File Photo

Dimon deemed bitcoin a fraud in 2017, comments he later said he regretted. In October, he said he was worthless but that he would follow clients and recently acknowledged that decentralized finance, where banks are replaced by algorithms, is “real.”

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In 2021, in the midst of the cryptocurrency craze, demon said Bitcoin was “useless”, while warning that governments will soon regulate digital currencies.

The cryptos, in the menu of the bank

Despite criticism of Bitcoin from the president of JPMorgan, the financial institution began offering clients access to six cryptocurrency products. I personally think bitcoin is worthless”, Dimon said during the event, according to the portal new york post.

While, David Kellychief global strategist at JPMorgan Asset Management, said: “At some point, I expect to see massive losses in cryptobecause there is nothing there.

“At some point, I expect to see massive losses in crypto, because there is nothing there,” David Kelly, senior strategist at JPMorgan, told Insider

But Kelly assured that the defeat is not over yetand argues that digital assets are in particular danger because they are useless. “It’s still fairy dust and very vulnerable to higher interest rates,” said the JP Morgan expert.

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