JPMorgan CEO Jamie Dimon: Crypto is a ‘decentralized Ponzi scheme’
Cryptocurrencies are dangerous “Ponzi schemes” that put billions of dollars at risk every year, JPMorgan CEO Jamie Dimon declared in a scathing review of the volatile digital assets.
In congressional testimony Wednesday, Dimon referred to himself as “a big skeptic” of cryptocurrencies like Bitcoin.
“They are decentralized Ponzi schemes, and the idea that it’s good for somebody is unbelievable,” he told lawmakers, calling Bitcoin and other cryptocurrencies “dangerous.”
Bitcoin, which hovered just above $19,000 at 6:45 a.m. ET Thursday, has lost more than half of its value in 2022 as cryptocurrencies across the board have suffered from a widespread selloff that has become known as the “crypto winter.”
House meeting
The US House Committee on Financial Services held a hearing on Wednesday where representatives from major US banks including Citigroup, Bank of America and Wells Fargo gave evidence. The committee’s chair, Maxine Waters, and ranking member Patrick McHenry are currently developing a bill to regulate stablecoins – a digital asset class that is tied to the value of an asset such as the US dollar.
Under the latest draft of the bill, seen by Bloomberg, it would be illegal to issue or create new “endogenously secured stable coins” like TerraUSD, which collapsed earlier this year in one of the biggest crypto bankruptcies ever.
Dimon said in his testimony to the House on Wednesday that billions of dollars had been lost each year to cryptocurrencies, noting their links to money laundering, ransom payments, sex trafficking and theft.
However, he argued that stablecoins would not be so problematic if they were properly regulated.
Bitcoin ‘worthless’
The JPMorgan chief has long been a vocal critic of Bitcoin and other decentralized digital assets — refusing to refer to them as currencies.
Last October, when Bitcoin’s value was nearing an all-time high, Dimon said the cryptocurrency was “worthless.”
Back in 2017, he referred to Bitcoin as a “scam” – a claim he later said he regretted. Last year, however, he doubled down on his aversion to the asset, saying he was “not a Bitcoin fan” and had “no interest in it.”
JPMorgan itself has not been quite as critical of Bitcoin, with the bank saying as recently as May that it saw “significant upside” for crypto investors. However, the lender’s payments chief said this week that while cryptocurrency had a “niche use case”, demand for tokens as a payment method had fallen drastically over the past six months.
The firm, and Dimon himself, have also supported Blockchain technology, which is the basis of cryptocurrencies such as Bitcoin.
In 2019, JPMorgan became the first US bank to create and test a digital coin that represents a fiat currency – in this case, the US dollar. The JPM coin, enabled by Blockchain, is used by the bank to execute intraday repurchase agreements.
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