JPMorgan Chase CEO Jamie Dimon likened crypto tokens to Ponzi schemes before a U.S. House Committee Oversight hearing on Wednesday, reiterating his well-known criticism of cryptocurrencies.
“I'm a major skeptic on crypto tokens, which you call currency like Bitcoin. They are decentralized Ponzi schemes,” he said, pointing to the billions of dollars lost each year through crypto-related hacks and how cryptocurrencies are used in crimes such as ransomware payments, money laundering, and sex-trafficking.
“And the notion that it is good for anybody is unbelievable,” Dimon added.
However, Dimon said he is not a skeptic of blockchain technology itself or other innovations such as Decentralized finance (DeFi) and “tokens that do something” such as those used to transact money or other information when asked what were the biggest obstacles preventing JPMorgan from being more active in the crypto space.
Speaking to the incoming legislation for regulating stablecoins or crypto assets that are intended to not fluctuate by holding their value to another asset such as the U.S. dollar, Dimon said: “There’d be nothing wrong with a stablecoin, which is like a money market fund, properly regulated.”
Most days stablecoins make up 75% to 95% of total trading volume in the crypto markets. Traders use the assets to protect their crypto gains during periods of heightened volatility. According to DeFi Llama, stablecoins alone are a $152 billion market, with the largest by circulating supply, Tether (USDT), holding a 44.5% share of the market followed by Circle's USDC, which accounts for 32.4%.
Though its use isn’t known outside of the banks own interbank transfers, JPMorgan has its own stablecoin-like asset, Dimon pointed out.
Launched in 2019, JPM Coin is used for cross-border payments, liquidity funding, and corporate treasury services between the bank and its clients in a closed system.
“JPMorgan, we are a big user of blockchain,” Dimon said.
David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at @DsHollers