JPMorgan CEO Jamie Dimon told United States lawmakers that he would shut down the cryptocurrency industry if he had their power.
Dimon has been a vocal critic of cryptocurrencies, like Bitcoin, saying there is not much of a use case outside of criminal activities.
He previously likened the crypto market to a Ponzi scheme and a fraud. “If I were the government, I’d close it down,” he said.
He highlighted that cryptocurrencies are typically used for nefarious activities like drug trafficking, money laundering, and tax avoidance.
His latest comments follow a series of hacks and scandals in the crypto industry, under increased scrutiny from US regulators and lawmakers.
The high-profile case of the collapse of FTX, Sam Bankman-Fried’s cryptocurrency platform, has increased pressure to regulate the market.
Senator Elizabeth Warren, a Massachusetts Democrat, used the hearing to team up with Republicans and banking leaders to take aim at the crypto industry.
“Today’s terrorists have a new way to get around the Bank Secrecy Act: cryptocurrency,” Warren said.
Dimon and other industry chiefs, including Bank of America Corp.’s Brian Moynihan, said they have safeguards to prevent terrorists and other illegal actors from using their institutions.
Warren contrasted that with the crypto market and said anti-money-laundering rules that banks follow should be extended to digital assets. All the CEOs agreed.
“I’m not usually holding hands with the CEOs of multibillion-dollar banks, but this is a matter of national security,” said Warren.
She has previously raised concerns about the need for regulation and links that major lenders have with the crypto industry.
Dimon’s repeated criticism of the crypto industry doesn’t extend to blockchain technology, which the bank has enlisted for several projects.
JPMorgan was an early mover with its JPM Coin, a proprietary stablecoin that allows clients to make blockchain-based payments.
The bank has projected that the token could handle as much as $10 billion in daily transactions within the next two years, from around $1 billion.
Charlie Munger warned Bitcoin’ stink ball’ could ruin civilisation
Dimon is in good company when it comes to his dislike for cryptocurrencies and the crypto industry.
The late billionaire Charlie Munger said the creation of an artificial currency, such as Bitcoin, can destroy civilisation as we know it and undo all of the progress humans have made.
Munger was Warren Buffett’s long-time business partner, who, before his death, shared his thoughts on cryptocurrency in an interview with the Wall Street Journal.
Munger was a well-known critic of cryptocurrencies, calling it “worthless”, “crazy stupid gambling”, and “massively stupid”, among other more profane remarks.
“Of course, it concerns me,” Munger replied when asked if the recent Bitcoin price increases worried him.
Munger said the concept behind artificial currencies more generally contradicts some of his fundamental ideas and that “every educated person ought to have”.
“Those ideas include what Adam Smith taught everybody. You have a huge increase in what I would call civilisation per capita, and it happened just because people take better care of their own property than somebody else’s,” Munger explained.
“To get Smithian results, you need a currency to facilitate exchange. And to make the currency respected widely, the trick we have used is the sovereign issues it.”
Having a currency as a medium of exchange was vital for humans to develop and create complex economic systems that generate value for billions of people.
“The only way to get from hunter-gathering to civilisation that we know of that’s ever worked is to have a strong currency,” he explained.
“It can be seashells, it can be corn kernels. It can be a lot of things. It can be gold coins. It can be promises in banking systems like we have in the United States.”
“When you start creating an artificial currency, you’re throwing your stink ball into a recipe that has been around for a long time and that has worked very well for a lot of people.”