To mark the launch of the JPM Coin, we look back at Dimon’s predictions, warnings, and outbursts over cryptocurrencies.
Jamie Dimon, chairman and chief executive of JPMorgan, has had a colourful relationship with bitcoin, which he has criticised time and again as the virtual currency’s worth has risen and fallen.
The Wall Street boss’s impassioned arguments against bitcoin make all the more surprising the bank’s decision to create a new digital coin: JPM Coin. The move, announced on February 14, suggests the bank has found a new willingness to experiment with the underlying technology that powers bitcoin.
Financial News looks back through the archives to trace Dimon’s predictions, warnings and outbursts over cryptocurrencies — and his bank’s efforts to embrace the growing market for these assets.
January 2014 Dimon kicked off his career in bitcoin commentary on the sidelines of the World Economic Forum in Davos, labelling the cryptocurrency a “terrible store of value” and suggesting that the Wall Street bank would stay as far away from the asset as possible. “The question is, do we even participate [with] people who facilitate bitcoin?” he said.
November 2015 Dimon’s early fears about bitcoin concerned the potential for governments to intervene in the currency if the market gained scale. He predicted a crackdown if cryptocurrencies ever got big enough. “Virtual currency, where it’s called a bitcoin vs a US dollar, that’s going to be stopped,” he said at the Fortune Global Forum.
“No government will ever support a virtual currency that goes around borders and doesn’t have the same controls,” Dimon added. “It’s not going to happen.” Bitcoin was trading at about $330 at the time.
October 2016 A year later, JPMorgan put its own spin on blockchain, the technology that underpins bitcoin. The bank launched Quorum, an enterprise-focused version of Ethereum, the network underlying the world’s second-biggest eponymous cryptocurrency.
“We have people building the most stress-tested financial systems in the world,” Amber Baldet, who was then programme lead for JPMorgan on Quorum, told The Wall Street Journal. “Bringing that enterprise expertise [to blockchain] is one of our strengths.”
September 2017 Dimon went for the jugular in arguably his most scathing attack on bitcoin, threatening to fire traders who bought the cryptocurrency.
“You can’t have a business where people can invent a currency out of thin air and think the people buying it are really smart. It’s worse than tulip bulbs, OK?” he said, referencing the tulipmania that saw the price of bulbs in the Netherlands rocket to historic highs before crashing in 1637.
“It’ll eventually blow up. It’s a fraud, OK?”
October 2017 Less than a month later, Dimon took a vow of silence. “I am not going to talk about bitcoin any more,” he said on an earnings call. Soon after, he broke his word: “If you’re stupid enough to buy it, you’ll pay the price for it one day.”
November 2017 Despite Dimon’s threat to sack traders dabbling in bitcoin, it emerged that JPMorgan was considering whether to help its clients trade the bitcoin futures that were then still being planned by exchange giant CME Group, which launched the contracts the following month.
January 2018 A show of remorse? Following an almighty surge in the price of bitcoin to almost $20,000 in the final month of 2017, Dimon spoke of his “regret” at calling it a fraud just months earlier. Bitcoin was trading at around $14,000 when he backtracked on that accusation.
May 2018 JPMorgan took its next dive into crypto. The bank called on Oliver Harris, then head of an in-house scheme to develop new financial technologies, to examine the potential uses of cryptocurrencies across its corporate and investment bank.
The news emerged just days after Daniel Pinto, co-president of JPMorgan, said in an interview that “cryptocurrencies are real, but not in the current form”.
October 2018 Happy birthday, bitcoin. Marking the 10-year anniversary of the digital currency at a conference in Los Angeles, Dimon was back on the offensive: “I didn’t want to be the spokesman against bitcoin. I don’t really give a sh*t — that’s the point, OK?”
February 2019 JPMorgan claimed it is the first US bank to create and successfully test a digital coin representing a fiat currency.
Umar Farooq, head of digital treasury services and blockchain at the bank, said: “We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators.
“Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.”
Bitcoin is currently trading at around $3,500.