Jamie Dimon, JPMorgan CEO, said cryptocurrencies are dangerous “Ponzi schemes” that put billions of dollars at risk every year.
The JPMorgan CEO told the House Financial Services Committee on Wednesday, that he is a major skeptic of crypto tokens and digital such as bitcoin.
Dimon added that crypto currencies are decentralized “Ponzi schemes” and “the notion that it’s good for anybody is unbelievable”, during the hearing which centered on holding America’s biggest banks accountable.
There has been a lot of talk about the role that crypto has played in facilitating theft, money laundering, sex trafficking, and other crimes. He further said “it is dangerous”.
The billionaire banker has drawn a line between speculative digital coins and “real” technologies like blockchains, decentralized finance (DeFi), and tokens that make the process easier. Dimon advised investors against buying crypto currencies.
Dimon, who criticized Democrats for opposing oil and gas investments, said he would encourage his clients to invest in properly regulated “stablecoins” that would be pegged to the US dollar.
Bitcoin now trades under $20,000. In November, it traded above $64,000. Over the same period, the crypto market cap has declined by about two-thirds, from approximately $2.8 trillion to $930 billion.
During the hearing on Wednesday, Dimon also discussed the US economy. Households were being crushed by rising gas and food prices, he warned. As concerns loom over the country, he also mentioned lingering supply-chain problems, Russia’s invasion of Ukraine, and the Federal Reserve’s tightening monetary policy.
“While these storm clouds build on the horizon, even the best and brightest economists are split as to whether these could evolve into a major economic storm or something much less severe,” Dimon said.
Dimon’s peers, namely CEO of Citigroup, Bank America and Wells Fargo told the lawmakers that their financial institutions have no plans to finance or back crypto mining, which has been blamed for exacerbating climate change.