Jamie Dimon.
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Jamie Dimon slammed bitcoin and some other crypto as “decentralized Ponzi schemes.”
The JPMorgan CEO said they enable theft, money laundering, and other crimes.
However, Dimon touted blockchain and said he would welcome a properly regulated stablecoin.
Jamie Dimon has doubled down on his disdain for bitcoin and some other cryptocurrencies, arguing they serve no purpose beyond vacuuming up new buyers’ money to pay out profits to their existing holders.
“I’m a major skeptic of crypto tokens, which you call currency, like bitcoin,” the JPMorgan CEO told the House Financial Services Committee on Wednesday.
“They are decentralized Ponzi schemes, and the notion that it’s good for anybody is unbelievable,” Dimon added during the hearing, which centered on holding America’s biggest banks accountable.
He noted that crypto facilitates theft, money laundering, sex trafficking, and other crimes. “It is dangerous,” he said.
The billionaire banker drew a line between digital coins that are purely speculative, and “real” technologies such as blockchain, decentralized finance (DeFi), and tokens that simplify processes or serve some other function.
Indeed, Dimon said he would have no issue with a properly regulated “stablecoin”, which is a digital currency that has its value pegged to a stable asset such as the US dollar.
“We are a big user of blockchain,” he said, highlighting the existence of a JPMorgan coin that can be exchanged for dollars at a fixed rate. “It can be moved just the way cryptocurrencies can be moved — stable value, very low cost.”
Dimon told the same Congressional committee in May 2021 that crypto was inferior to conventional assets such as dollars and gold. He advised investors not to buy them, and urged regulators to scrutinize them more closely.
Moreover, the JPMorgan boss said in 2017 that bitcoin was a fraud, and the hype around it would end in disaster.
Dimon is one of many prominent executives to sound the alarm on crypto. In April, Warren Buffett said he wouldn’t pay $25 for all the bitcoin in the world. Buffett’s business partner, Charlie Munger, declared the crypto was worthless, undermined the US financial system, and made the nation look foolish compared to others that have banned it.
Bitcoin, which surged in price to north of $64,000 in November, now trades below $20,000. The global crypto market cap has shrunk by more than two-thirds over the same period, from roughly $2.8 trillion to $930 billion.
Dimon also shared his outlook for the US economy during the Wednesday hearing. He warned that rising gas and food prices were squeezing American households. He also flagged lingering supply-chain problems, Russia’s invasion of Ukraine, and the Federal Reserve tightening its monetary policy as concerns hanging over the country.
“While these storm clouds build on the horizon, even the best and brightest economists are split as to whether these could evolve into a major economic storm or something much less severe,” Dimon said.