JPMorgan Boss Calls Cryptocoins ‘Decentralised Ponzi Schemes’

Cryptocurrencies are nothing more than “decentralised Ponzi schemes”, Jamie Dimon, the chief executive of Wall Street bank JPMorgan Chase & Co, has told the US Congress.

Dimon described himself to lawmakers as “a major sceptic on crypto tokens”, saying the notion cryptocoins were “good for anybody is unbelievable”, adding that they were “dangerous”.

He said billions of dollars were lost every year to cryptocurrencies and noted their links to money laundering, ransomware, theft and other criminal enterprises.

But he said so-called stablecoins, which are linked to the value of a fiat currency, wouldn’t be problematic with the proper regulation.

Stablecoin legislation

JPMorgan actively uses the blockchain technology that underlies Bitcoin for its own purposes, Dimon said.

Dimon spoke before the US House of Representatives’ Financial Services Committee, whose chair Maxine Waters and Ranking Member Patrick McHenry are working to reach an agreement on stablecoin legislation.

Under the latest version of the bill seen by Bloomberg it would be illegal to issue or create new “endogenously collateralised stablecoins”, a model similar to that of TerraUSD, which collapsed earlier this year in one of the biggest-ever crypto routs.

In 2017 Dimon said he believed Bitocin was a “fraud”, but later said he regretted the comment.

‘Worthless’

Last October, as Bitcoin reached a record high, Dimon said the crypto-asset was “worthless” but that he would follow customers.

The crypto token has lost more than half of its value so far this year amidst a broader selloff of digital assets.

In 2019 JPMorgan became the first American bank to create and deploy a digital coin representing a fiat currency, the blockchain-based JPM Coin, which it uses to carry out intraday repurchase agreements.