JPMorgan’s Co-President confirmed that the bank is in fact researching cryptocurrencies and how they can play a role in the current financial system.
Daniel Pinto, JPMorgan’s co-president, revealed the bank’s interest in cryptocurrency during an interview with CNBC, but expressed concerns about the current state of the cryptocurrency markets. Nevertheless, he did say that the bank does believe that the technologies will eventually play a role in the current financial system once they have time to develop.
CNBC asked Pinto about his views on cryptocurrency and pointed out that JPMorgan’s competitors are ahead of them in regard to trading Bitcoin futures.
“Are cryptocurrencies another opportunity for you? Your competitors already help trade bitcoin futures and are preparing to get more involved in trading digital currencies.” CNBC asked.
Pinto replied saying, “We are looking into that space. I have no doubt that in one way or another, the technology will play a role. [Regarding bitcoin], you cannot have something where the business proposition is to be anonymous and to be the currency for unknown activities. That will have a very short life, because people will stop believing in it, or the regulators will kill it. I think the concept is valid, you have many central banks looking into. The tokenization of the economy, for me, is real. Cryptocurrencies are real but not in the current form.”
Pinto’s response clearly shows that his knowledge of Bitcoin and other alternative cryptocurrencies is highly limited. Bitcoin’s anonymity, for instance, is simply a myth created and supported by its many critics. Clearly Pinto hasn’t done much thorough research.
JPMorgan’s CEO, Jamie Dimon, has been a longtime critic of Bitcoin and cryptocurrencies, and it is clear that this culture is spreading throughout the company. Several months back, JPMorgan’s annual report listed Bitcoin and cryptocurrencies as a threat to its business model.
“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation,” the bank wrote in the report. The bank also noted that they have already had to modify their products due to new technologies, such as cryptocurrencies.
It is reasonable to assume that JPMorgan’s overwhelmingly negative stance towards Bitcoin and cryptocurrencies is a result of the threat they pose to their business. When and how they adapt to the changing tides remains to be seen.