JPMorgan, the largest bank in the US with a $384 billion market valuation, has tasked Fintech and In-Residence programme head Oliver Harris to create various strategies the corporation could utilize to help its clients to invest in the cryptocurrency market.
In 2017, JPMorgan CEO Jamie Dimon, who is often described as one of the most powerful figures in the global finance industry, heavily condemned bitcoin by calling the dominant cryptocurrency a fraud.
In January of this year, CCN.com reported that Dimon regretted offering a premature criticism of bitcoin. Dimon stated that he regret making comments such as “bitcoin is a fraud” and “bitcoin is worse than the tulip bubble.” Dimon said:
“The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all. The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually.”
Several experts and large-scale investors in the cryptocurrency sector such as Blocktower Capital founder Ari Paul, a cryptocurrency hedge fund founded and operated by former Goldman Sachs executives, have previously stated that they do not believe Dimon lacks knowledge in the cryptocurrency sector.
Rather, Dimon perceives bitcoin as a threat to the offshore banking services JPMorgan offers, as cryptocurrencies can transfer large sums of money in orders of magnitude better than banks.
In an interview with Business Insider, Paul explained:
“So most of the financial luminaries, I think genuinely don’t understand what it’s trying to be. Jamie Dimon’s an exception. By all accounts, I know people who spoke to him about cryptocurrency four years ago. He gets it, he understands it, probably better than me and he views it, I think, as a brand new competitor to JPMorgan. So he understands that JPMorgan collects a lot of fees for providing a storage of wealth in a secure way that’s judgement resistant to clients, and bitcoin does it an order of magnitude better.”
Although JPMorgan acknowledges and considers bitcoin as a threat to its business model, it has started to prepare strategies and products the bank could use to facilitate the demand from its clients because the cryptocurrency market has become more difficult to dismiss and the demand from investors in the public market has drastically increased over the past year.
Moving forward, Harris, who was appointed as the head of the firm’s new cryptocurrency department, will report into JPMorgan blockchain initiatives head Umar Farooq and work with the bank’s blockchain analysts and developers to serve clients that are seeking to invest in cryptocurrencies as a long-term investment.
Already, other major banks like Morgan Stanley have started to create products that allow investors to invest in the cryptocurrency market with minimal risks. Given that Morgan Stanley, Goldman Sachs, NYSE, and JPMorgan have all started to develop cryptocurrency trading products in a similar time frame, it is likely that the finance sector will see public cryptocurrency instruments by the end of this year by these major banks.
Images from Shutterstock
Last modified: May 20, 2020 8:47 PM UTC