JPMorgan CEO calls crypto ‘decentralized Ponzi schemes’

JPMorgan CEO Jamie Dimon regards crypto as a tale of two cities, with “crypto tokens that you call currencies” on one side and “real” innovations on the other.

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

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

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

Asked for his thoughts about the draft U.S. stablecoin bill, Dimon said he believes that there is nothing wrong with stablecoins that are properly regulated and that the 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 he has no interest in backing the sector on a personal level. He has softened his stance on crypto on occasion, 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 been pushing into the blockchain technology space. The financial giant launched its own in-house stablecoin — JPM Coin in October 2020 — the first cryptocurrency backed by a U.S bank, which was aimed at increasing settlement efficiency.

A week after rolling out the coin, the bank launched a new business division dedicated to blockchain technology called Onyx. Since then the Onyx platform has been utilized by large institutional customers for round-the-clock global payments.

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

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

Related: ‘Most of crypto is still junk’ and lacks use case — JPMorgan blockchain head

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