JP Morgan’s Blockchain Lead Thinks Most Crypto Is Just ‘Noise’
Umar Farooq, CEO of Onyx by JP Morgan and Global Head of Financial Institution Payments, believes that “most crypto is still junk” with “the exception of a few dozen tokens.”
In the Monetary Authority of Singapore’s Green Shoots Series 2022, Farooq stated that although regulation has not caught up, there are not many cases of use of digitized tokens, adding: “Everything else [Cryptos], which has been mentioned is either noise or frankly, you know, it’s just going to go away. So, in my opinion, the use cases have not fully emerged.”
Exec believes regulated entities will be frontrunners
As head of a bank-led blockchain platform, Farooq also noted that while private options will always exist in the crypto sector, users will turn to regulated financial institutions when it comes to “serious transactions” of high value. He stressed: “You know the government, the regulators and the whole financial infrastructure are behind them.”
The executive’s comments follow MAS’ new announcement to regulate crypto with Ravi Menon, the watchdog’s chief executive, saying the agency will block crypto speculation but not crypto innovation.
As for what is holding back financial institutions from adopting new technology in the evolving regulatory space, Farooq explained that there is significant regulatory friction, but for financial stability, he does not believe that a higher level of friction is unwarranted.
Recently, it was reported that the Monetary Authority of Singapore (MAS) is considering stricter rules to protect consumers. Under the new rules, the regulator may include customer suitability tests and limit the use of leverage and credit facilities for crypto-retail investors.
“I think it’s obviously a little bit more complicated given our regulatory regime, and frankly, that’s what makes us safe versus new technology in this industry. Probably makes us a little bit slower as well,” Farooq added.
Virtual asset industry ‘not mature’
The Onyx CEO is also of the opinion that the crypto industry “has not matured” and most of the money “being spent in the current web3 infrastructure is for speculative purposes.”
“Regulation has increased, and I think that’s why you see that the financial industry in general is a bit slow and catching up. But when it catches up, and whoever catches up…but the big institutions that catch up are going to be absolute winners,” Farooq added.
With that, Farooq also accepted that JP Morgan’s digital asset division has invested “very heavily” in building the infrastructure that enables blockchain application, but not so much in the use of blockchain technology.
For Be[In]Crypto’s Latest Bitcoin (BTC) Analysis, click here.
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.