JPMorgan CEO calls crypto ‘decentralized Ponzi schemes’

While testifying before United States (US) lawmakers, JPMorgan Chase CEO Jamie Dimon referred to himself as a “huge skeptic” about “crypto tokens that you call currency like Bitcoin,” labeling them as “decentralized Ponzi schemes”.

Dimon was asked what is holding him back 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 proceeded to bemoan crypto tokens that identify as coins.

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

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

Despite Dimon’s views on the cryptocurrency space, JPMorgan has been pushing 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 launching 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 clients for 24/7 global payments.

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

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

Related: ‘Most crypto is still junk’ and lacks a use case: JPMorgan’s blockchain chief

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