JPMorgan CEO calls crypto ‘decentralized Ponzi schemes’

While testifying before US lawmakers, JPMorgan Chase CEO Jamie Dimon described himself as a “huge skeptic” of “crypto-tokens that you call currency like Bitcoin,” labeling them “decentralized Ponzi schemes.”

Dimon was asked what is keeping him from being more active in the crypto space during an oversight hearing held by the House Financial Services Committee on September 21.

Dimon emphasized that he sees value in blockchain, decentralized finance (DeFi), ledgers, smart contracts and “tokens that do something,” but then went on to lambast crypto-tokens that identify as currencies.

Asked for his thoughts on the draft US stablecoin bill, Dimon said he believes there is nothing wrong with stablecoins being properly regulated and that regulation should be similar to what money market funds are subject to.

Dimon has once described Bitcoin as a “fraud” and has reiterated in the past that he has no interest in supporting the sector on a personal level. He has sometimes softened his stance on crypto, once highlighting that it can serve important use cases at times such as cross-border payments.

Despite Dimon’s views on the cryptocurrency space, JPMorgan has pushed into the blockchain technology space. The financial giant launched its own internal stablecoin – JPM Coin in October 2020 – the first cryptocurrency backed by a US bank, which aimed to increase settlement efficiency.

A week after the rollout of the coin, the bank launched a new business division dedicated to blockchain technology called Onyx. Since then, the Onyx platform has been used by large institutional customers for 24/7 global payments.

JPMorgan also became the first major bank in the Metaverse after opening its virtual lounge in the blockchain-based world Decentraland in February. The move followed a report released by the firm that touted Metaverse as a $1 trillion opportunity.

JPMorgan has been hiring new staff to push into the blockchain and crypto space, most recently announcing on September 9 that it has hired former Microsoft executive Tahreem Kamptom as its senior payments manager. Kamptom is expected to help JPMorgan explore blockchain technology, given his Linkedin bio shows he has worked on crypto-related payment methods.

Related: “Most crypto is still junk” and lacks scope – JPMorgan blockchain head

During the hearing, the lawmakers also asked other top executives of US banks if they had plans to finance crypto mining. Citigroup CEO Jane Fraser, Bank of America CEO Brian Moynihan and Wells Fargo CEO Charles Scharf all indicated their banks had no intention of doing so.