No one uses crypto to pay for things anymore, says the head of payments at JPMorgan
JPMorgan Chase’s global head of payments Takis Georgakopoulos claims that cryptocurrency has “a niche use case” and said demand for cryptocurrencies as a payment method has seen a drastic decline in the past six months.
Speaking in an interview with Bloomberg Television on Tuesday, Georgakopoulos said that while the bank still accepts customers who want to use cryptocurrencies as a payment method, they are not taking any greater risks as the coins fall out of popularity.
“When it comes to crypto as a payment method, we say a lot of demand from our customers, let’s say until six months ago. We see very little right now,” Georgakopoulos concluded.
Still betting on the sector
JPMorgan was one of the first banks to move into the cryptocurrency space, and despite its recent drop in popularity and price, the bank is still betting big on the tokenized asset sector. While bashing crypto’s recent popularity, Georgakopoulos took the opportunity to rattle off the many benefits of digital currencies.
“Blockchain technology certainly has some big advantages: the fact that people can exchange information without a centralized exchange, [and] when it comes to security, privacy, etc.” Georgakopoulos said. JPMorgan also sees the gaming space as another growth area, where the “intersection between the real, the virtual and crypto” in both traditional games and the metaverse is getting bigger.
But with a recent crash in crypto prices showing little signs of ending, it’s unclear when crypto’s popularity will return. Cryptocurrencies have experienced the sharpest decline on record in the market this year, losing more than $2 trillion from their market value in less than a year. High-profile digital assets such as Terraform labs and Three Arrow Capital have been pushed into bankruptcy, and cryptocurrency king Bitcoin, which was priced above $65,000 in November 2021, is now below $20,000.
What about other alternative payments?
Asked about other digital tokens such as central bank digital currencies (CBDCs), Georgakopoulos was reluctant to make any predictions as little is known about how land digital currencies would work.
“We haven’t seen them yet and the rules of how they will play out have not been written with the possible exception of China,” Georgakopoulos said, referring to China’s digital yuan that has been in testing since 2020 and is one of the most advanced of all. large economy, but faces foreign scrutiny and criticism over possible tracking.
Georgakopoulos says that JPMorgan believes that blockchain and digital currencies used as alternative payment methods have some inherent advantages, but also face some major obstacles.
“The most exciting thing about a digital currency on a blockchain is the ability to move information and value at the same time, in real time, without any of the limitations of the traditional payment systems,” notes Georgakopoulos, which is why JPMorgan is investing in its own blockchain network that can take fiat currencies as well as digital currencies or central bank digital currencies as they develop in the future.
JPMorgan also backed London-based digital asset startup Ownera last week through a $20 million Series A funding round. He argues that in areas such as the Internet of Things, smart devices and mobility there may be a need for new digital payments in the future, but for now the world is still a long way off.
“I think we still … have some way to go on that front,” he says.
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