Speaking in congressional testimony on Wednesday, Jamie Dimon, CEO of JPMorgan, said he was a “major skeptic of crypto tokens [...] like Bitcoin” and called them “decentralized ponzi schemes.”
“The notion that it’s good for anybody is unbelievable,” Dimon said, pointing to the use of cryptocurrencies in ransomware attacks, sex trafficking and money laundering.
Dimon also spoke about stablecoins, which are cryptocurrencies pegged to the value of fiat currencies. They’re typically backed by cash or material assets. In some cases, their value may be controlled by algorithms.
The most famous example of an algorithmic stablecoin, TerraUSD (UST), imploded back in May, wiping $83 billion from decentralized finance and reducing Terra’s ecosystem to nil.
Dimon argued that a "properly regulated" stablecoin would not be a problem, and added that he sees value in decentralized finance (DeFi), blockchain and "tokens that do something." He added that JPMorgan is "a big user of blockchain."
Dimon’s crypto ambivalence
The JPMorgan chief has a long history of offering up mixed messages on crypto. In 2014, he was an early nocoiner, telling CNBC that Bitcoin was “a terrible store of value” and that the cryptocurrency “can be replicated over and over.”
Over the years, Dimon has called the leading cryptocurrency a “fraud” and “fool’s gold” but in 2019, JPMorgan launched its own U.S.-dollar pegged stablecoin, JPM Coin. The bank also allows its wealth management clients to buy into Bitcoin, Ethereum, Bitcoin Cash and Ethereum Classic or certain related products from Grayscale and Osprey.
Dimon told attendees at the annual meeting for the Institute of International Finance last year that he “personally think[s] Bitcoin is worthless.” However, in a letter to shareholders earlier in April, he wrote: "Decentralized finance and blockchain are real, new technologies that can be deployed in both public and private fashion, permissioned or not." Dimon’s letter also said JPMorgan is "at the forefront" of these innovations.