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Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co, speaks during a House Financial Services Committee hearing in Washington on September 21, 2022. Photo: Bloomberg

Cryptocurrency tokens are ‘decentralised Ponzi schemes’, JPMorgan Chase CEO Jamie Dimon tells US lawmakers

  • Dimon acknowledged being a ‘major sceptic’ when one lawmaker brought up his history of criticising cryptocurrencies
  • The executive once called bitcoin a ‘fraud’, comments he said he regretted, and JPMorgan has since adopted its own blockchain and token

Jamie Dimon didn’t mince words when a US lawmaker mentioned the executive’s history of criticising cryptocurrencies.

“I’m a major sceptic on crypto tokens, which you call currency, like bitcoin,” the JPMorgan Chase & Co chief executive officer said in congressional testimony Wednesday. “They are decentralised Ponzi schemes.”

Stablecoins – digital assets tied to the value of the US dollar or other currencies – wouldn’t be problematic with the proper regulation, and JPMorgan is active in blockchain, Dimon said.

The comments represent the latest criticism levelled against digital currencies by Dimon, who once called bitcoin “a fraud” before eventually saying he regretted the comments.

China’s blockchain execs: cryptocurrency is ‘biggest Ponzi scheme’

House Financial Services Committee Chairwoman Maxine Waters and Ranking Member Patrick McHenry have been working to reach an agreement on stablecoin legislation. Under the latest version of the bill, it would be illegal to issue or create new “endogenously collateralised stablecoins” such as those similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year, according to a copy obtained by Bloomberg.

While Dimon has been a vocal critic of bitcoin, the firm has been focused on using blockchain for financial services. JPMorgan uses its custom blockchain and token, JPM Coin, to conduct intraday repurchase agreements, which allows other financial institutions to take out short-term loans using high-quality collateral. JPMorgan was also the first Wall Street bank to launch a presence in the metaverse in February.

Dimon deemed bitcoin a fraud in 2017, comments he later said he regretted. In October, he said it was worthless but that he’d follow clients and recently acknowledged that decentralised finance – where banks are replaced by algorithms – is “real”.