Financial industry leaders speak out after JPMorgan crypto reversal

  • By Tom Cleveland

  • February 23, 2019
  • 1:44 am BST

When JPMorgan Chase announced its first major steps into the crypto world, the reactions were ones of astonishment, amazement, and surprise, while a significantly smaller contingent regarded the news as positive, regardless of the limited scope of the new JPM Coin. The Chase coin will be used behind the scenes to increase efficiencies in its treasury management service infrastructure by utilizing the benefits of blockchain technology.

Crypto enthusiasts were incredulous, partly because Jamie Dimon, the outspoken Chairman and CEO of JPMorgan, had blasted Bitcoin openly in the press, calling it a “fraud”, “worse than tulip bulbs”, and something that will not end well for investors. It seems that he has changed that tune, but for the record, his bank has always spoken highly about blockchain technology.

Initial opinions from Crypto industry leaders followed that of Brad Garlinghouse, Ripple’s chief executive: “As predicted, banks are changing their tune on crypto. But this JPM project misses the point –- introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer.”

Financial services industry leaders are now beginning to chime in with their reactions, which, today, include that of a billionaire in the venture capital space and the head of the CME Group. Each shared their thoughts with the press over recent happenings in the crypto ecosphere.

Tim Draper, an American venture capital investor and founder of Draper Fisher Jurvetson (DFJ), on a televised segment on Fox Business News, asserted that: “Bitcoin is the most secure currency right now and advises everyday people to invest a little into the movement before it’s too late”. A billionaire in his own right, Draper has invested “millions”, as he put it, in cryptocurrencies. As for the JPMorgan announcement, he viewed it as “positive news for the entire industry.”

Draper, however, did admit that: “Not many Bitcoin knock offs have worked particularly well, but they all add to the interest in Bitcoin.” His enthusiasm has not waned since last May when he said: “This is going to be the biggest change in the history of the world and it’s so exciting. I thought the Internet was super exciting, but this is going to completely change everything and the government itself is going to change.”

Terry Duffy, CEO of leading derivative market CME Group, also spoke from a different perspective, noting that it very difficult for banks to get involved in the crypto market due to constraining regulations from the government. He welcomed the JPMorgan event and also noted that several other banks, including Goldman Sachs, have done work in the background with decentralized ledger technology such that “now they’re coming up with a couple of offerings.”

Duffy’s primary message, however, was that, for real inroads to be made into the banking system, the government needs to change its present way of thinking: “The key to the success of any currency, whether it’s fiat or crypto, is going to be associated with the government. So I think the government needs to be more involved.”