JPMorgan CEO Jamie Dimon: Crypto is a decentralized Ponzi scheme

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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 on Wednesday, Dimon referred to himself as a major skeptic on cryptocurrencies like Bitcoin.

They are decentralized Ponzi schemes, and the notion thats good for anybody is unbelievable, he told lawmakers, calling Bitcoin and other cryptocurrencies dangerous.

Bitcoin, which was hovering just above $19,000 at 6:45 am ET on Thursday, has lost more than half its value in 2022, as cryptocurrencies across the board have suffered a widespread selloff thats become known as the crypto winter.

House meeting

The US House Committee on Financial Services held a hearing on Wednesday in which representatives from major American banks including Citigroup, Bank of America, and Wells Fargo gave evidence. The committees chairwoman, Maxine Waters, and ranking member Patrick McHenry are currently developing a bill on regulating stablecoinsa digital asset class that is tied to the value of an asset like the US dollar.

Under the most recent draft of the bill, seen by Bloomberg, it would be illegal to issue or create new endogenously collateralized stablecoins like TerraUSD, which collapsed earlier this year in one of the largest ever crypto bankruptcies ever.

Dimon said in his testimony to the House on Wednesday that billions of dollars had been lost every year to cryptocurrencies, noting their links to money laundering, ransomware, 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 and refuses to refer to them as currencies.

In October last year, as Bitcoins value was approaching an all-time high, Dimon said the cryptocurrency was worthless.

Back in 2017, he referred to Bitcoin as a fraudan assertion he later said he regretted. Last year, however, he doubled down on his aversion to the asset, saying he was not a Bitcoin supporter and had no interest in it.

JPMorgan itself hasnt been quite so critical of Bitcoin, with the bank saying as recently as May that it saw significant upside for crypto investors. However, the lenders payments boss said this week that while cryptocurrency had a niche use case, demand for the tokens as a payment method had drastically declined over the past six months.

The firm, and Dimon himself, have also been backers of Blockchain technology, which is the foundation of cryptocurrencies like Bitcoin.

In 2019, JPMorgan became the first American bank to create and successfully test a digital coin representing a fiat currency in this case, the US dollar. The JPM Coin, enabled by Blockchain, is used by the bank to carry out intraday repurchase agreements.

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