Banking Giants Fight Crypto at US Congress

The United States House of Representatives Financial Services Committee on 10th April recently saw CEOs of several banks stand before them to give their thoughts on banking’s status quo following the 2008 financial crisis, including the position of cryptocurrencies and blockchain.

Warren Davidson’s representative view was that blockchain had found its place in addressing cybersecurity and transforming outmoded financial systems, but felt the regulation was still dragging behind other jurisdictions where progressive measures were being introduced to facilitate the blockchain industry.

The chairman and CEO of the banking giant JP Morgan Chase, Jamie Dimon suggested that the bank was “supportive of cryptocurrencies as long as they are properly controlled and regulated”. It was highlighted that, at the time, Dimon was one of cryptocurrencies biggest detractors but with the new JPM Coin being announced, it’s clear that his view has now changed. Dimon’s latest comments is that, over time, blockchain is able to work although he still felt that there wasn’t any value behind cryptocurrency.

JPM Coin

So the new cryptocurrency from JPM Morgan is going to be the first dollar-backed cryptocurrency from a major bank. The coin was announced by the bank in February this year as an institution-to-institution service. A permissioned blockchain variant of Ethereum called Quorum is used as the distributed ledger platform.

“The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional accounts. Exchanging value, such as money, between different parties over a blockchain requires a digital currency, so we created the JPM Coin.”

Charles Scharf is the Chairman and CEO of the Bank of New York Mellon voiced a guarded approach in regards to the cryptocurrency’s position on the international financial system. He suggested:

“Cryptocurrencies are very early in their existence. They are not significant today to speak of in terms of being used as a real currency to move value, and so we are actively thinking about what we want to do. One of the biggest issues that we have relates to any money laundering and KYC.”