For the first time, JPMorgan CEO Jamie Dimon has given his thoughts on Facebook’s planned Libra cryptocurrency. Although known for being a prominent Bitcoin bear, he has since seemingly changed his tune on the cryptocurrency industry.
JPMorgan CEO Jamie Dimon took heat last year for his comments on Bitcoin. Calling it a “fraud,” he has since backtracked from his comments. In February, the bank even released its own cryptocurrency, called JPM Coin pegged to gold bars.
Now, the CEO is weighing in on the buzz surrounding Facebook’s new cryptocurrency. Set to launch in 2020, questions have been swirling regarding how the Libra will be implemented. Dimon’s main concerns hinge on whether or not Facebook will function much like a bank.
Will Facebook Be a Bank?
“Will they follow banking rules or KYC, BSA, AML?” Dimon told Yahoo Finance. He stressed that JPMorgan does not want to be “forced into someone else’s ecosystem.” Libra, definitely, has the change to do this given the scope of its aspirations.
Perhaps Dimon also considers the Libra a possible threat the traditional banking institutions as well. JPMorgan was noticeably absent from the Libra’s long list of corporate backers as part of its Libra Association.
Dimon Bullish on Blockchain for All the Wrong Reasons
On the question of blockchain technology, Dimon has now become bullish on the technology. Despite calling Bitcoin a “fraud worse than tulip bulbs” in 2017, he has now come around the underlying technology’s promise. “Blockchain is real. We have the JPMorgan coin blockchain. And competition is real,” Dimon said. However, he still thinks that the banking system does not need cryptocurrencies. With services like “Zelle, real-time p2P, and TCH The Clearing House,” we already have what cryptocurrencies promise, he says. More importantly, he argues it’s already very cheap and secure.
However, how secure are these systems really? Everything is working until it isn’t. In 2007, the financial system was thought to be operating at the highest level, only to come crashing down that year. The current systems in place may provide stability now, but centralized banking systems are ultimately linked to one another. What this means is that one major breach, and it could spell chaos.
This is ultimately the promise of blockchain technology: to prevent a cascading crisis like this from ever happening. However, Dimon still fails to see its true potential. Instead, he sees the technology as a mere appendage to traditional banking. Little does he know, however, that the blockchain industry’s goal is to upend traditional finance altogether.
Do you believe traditional banks will be able to catch up with emerging developments in the cryptocurrency world? Let us know your thoughts below.