The head of the largest bank in the US said Thursday that bitcoin is a “terrible store of value,” in part because international governments, bankers, and other officials are unsure whether they can trust the digital currency.
Jamie Dimon, the CEO of JP Morgan Chase – which has $2.509 trillion in total assets – told CNBC that the cryptocurrency does not have much staying power because the hurdles it faces are insurmountable.
“It’s a terrible store of value. It could be replicated over and over,” he said. “It doesn’t have the standing of a government.”
Bitcoin proponents say that the currency’s ability to exist without any centralization is what makes it so appealing. It is a peer-to-peer payment system that is formulated when computers compete with each other to “mine,” or solve cryptographic problems, and are assigned bitcoins as a reward.
The use of bitcoin became so prevalent in 2013 that its value surged from $13 to over $1,000 by the end of the year, when it was the subject of Senate hearings that were largely neutral and at times positive towards the digital currency.
Dimon went on to cite media coverage that reported on the use of bitcoin for nefarious purposes – drugs and the solicitation of murder among them.
“And honestly, a lot of it – what I’ve read from you guys – a lot of it is being used for illicit purposes. And people who will get upset with it is governments,” Dimon said. “Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously it’s almost impossible to do with something like that.”
Despite any flaws bitcoin may have, the digital currency has proven to be an especially popular system worth investigating, and has spawned a growing list of parallel online currencies, including Litecoin, Dogecoin, and Coinye. Chase seems to agree, as the bank filed a patent application back in 2000 claiming a “computer-implemented method of providing an anonymous payment.”
US Treasury secretary Jack Lew, also speaking to CNBC, said that he has spoken to leaders in the financial industry and has decided that the current course of action will consist mostly of a wait-and-see strategy.
“Bitcoin is a phenomenon that we need more time to discuss,” Lew said Thursday. “From the government’s perspective, we have to make sure it does not become an avenue to funding illegal activity or to funding activities that have malign purposes like terrorist activities. You know, it is an anonymous form of transaction, and it offers places for people to hide.”
Dimon speculated that bitcoin will soon become popular enough that the government will intervene, which could spell out the cryptocurrency’s demise.
“They will eventually be made as a payment system to follow the same standards as the other payment systems and that will probably be the end of them,” he said.
Thought it was gonna be Krugman, but no, Dimon gets top spot on the list of bitcoin hatin’ idiots. He sounds just like a Tea-Partier trying to refute evidence of climate change.
No facts or science in his arguments, just anecdotal suppositions.
I’ve been somewhat leery about BITCOIN…….UP TO NOW, anyway……BUT…. If this billionaire sludge, Dimon, (read DIAMONDS) comes on, to bad-mouth BITCOIN, I realize now, very clearly that BITCOIN is a bigtime threat to his TRILLION DOLLAR US DOLLAR SHILL, and I will commence to do my financial transactions without the GREAT MIDDLEMEN THIEVES (US DOLLAR)….right-on Bitcoin!
He made a funny! A banking exec talking about trust.
He’s obviously on the rails, his argument that ‘Bitcoin’ could be used for nefarious purposes is weak and dribbles with desperation on JPMorgans part. Most dollar bills are covered in cocaine traces anyway and dollar bills have been used to pay off hit-men since time in memorial.
If JP Morgan are Denouncing BitCoin, Obviously this signifies that BitCoin is on the rise which threatens the JP Morgan Status Quo. This can only be a good thing to happen to the world!!
GO BITCOIN GO!!!! Be Free From JP Morgan Criminal Hold on the World!!
He needs for it to fail, the Bitcoin transfer process is way more efficient than his, and he (& banks in general) makes a lot of money on the existing system. 3-5% off the top of everything they handle. But he may as well try to stop the tides from rising.
Please explain how a published, open transaction ledger is more anonymous than printed “cash”? This is the stupidest viewpoint I’ve ever seen.
what a clown! Let’s styate off ther bat the big banks in USA and Europe have been caight manipulating interest,laundering money for terrorists and drug cartels,fixing the forex markets, hte metals market etc etc..he’s hardly an ‘honest’ broker! For me crypto currencies will succeed and work alongside world currencies. In fact it wil compel the banking world to transact in an HONEST way, for the first time in history the people will have control over their money and not some suits dictat! Dimon is clueless!