A tsunami for the financial world? Jamie Dimon, one of the most vocal critics of cryptocurrencies, has announced that JPMorgan will also be looking into stablecoins. We take a closer look at this rush by financial institutions towards these assets.
JPMorgan CEO rallies behind stablecoins despite his doubts
JPMorgan CEO Jamie Dimon has historically been very skeptical about cryptocurrencies. In the past, he has compared Bitcoin to cigarettes: bad for its buyers, but they are free to buy them if they want to. Now it seems he has adopted a similar attitude toward stablecoins.
In a call to investors reported by CNBC, Jamie Dimon said that the bank could not afford to ignore this lucrative market. The largest bank in the United States has already offered a “deposit token” recently, but it will also look into stablecoins themselves:
We are going to get involved in both the JPMorgan Deposit Coin and stablecoins to understand them and be competent in that area. […] I think they are real, but I don’t see why you would want to use a stablecoin rather than just a payment.
Staying in the race against FinTechs
The CEO of JPMorgan pointed out that FinTechs are offering stablecoins and other payment technologies in order to chip away at the market share of banks, which are more hampered by regulations. Hence the need to position itself on stablecoins in order to protect the bank’s dominant position:
You know, these guys are very smart. They’re trying to find a way to create bank accounts, get into payment systems and loyalty programs, and we need to be aware of that. And the best way to be aware of that is to be involved in it.
JPMorgan therefore seems to have adopted the maxim “keep your friends close, and your enemies even closer.” It is not alone in this. Many banks are exploring the field. This is especially true in the United States, where the possibility of a central bank digital currency (CBDC) is receding, with Republicans fiercely opposed to it. Without a CBDC, the field is open for stablecoins, which could be regulated as early as this week. Financial institutions and large companies are therefore all in the starting blocks to take advantage of a market that currently has a capitalization of $263 billion.
