Jamie Dimon infamously called bitcoin a fraud last Summer and even went as far as to say any JP Morgan employee caught trading bitcoin would be fired. It appears the banking behemoth has made a U-turn as it has recently released a report stating cryptocurrencies pose a threat to their banking services.
The report known as ‘Form 10-K’ is an annual report that is a lengthy 300 pages and states cryptocurrencies such as Bitcoin and Ethereum posed a risk to JP Morgan banking services. The report reads:
“Furthermore, both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation.”
Last month JP Morgan released an in-depth report on cryptocurrencies which has been called the ‘Bitcoin bible’ by some. It provides further strategies on how to cope with threat from cryptocurrency the report stated “Opportunities for banks to utilize blockchain technologies for conducting business could have far-reaching implications for the sector.”
JP Morgan’s Brief Crypto History
The annual report briefly described how they intended to keep business from technologies that require no intermediation:
“New technologies have required and could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies.”
The company has been active in the blockchain ecosystem and appears to take the technology seriously. They joined the Ethereum Enterprise Alliance and is now building its own enterprise version of Ethereum – Quorum. In May 2017 JP Morgan partnered with Zerocoin Electric Coin Company (ZECC) – the company behind ZCash – to implement the cutting-edge privacy features to Quorum. Until April 2017 it was part of the R3 blockchain consortium, it left along with many other members citing its interest in exploring private enterprise blockchain solutions.
However, JP Morgan has largely remained on the edges of the new field and has kept an even wider berth from the more decentralised crypto-assets such as bitcoin. Time will tell if JP Morgan can develop its technology offering to not get ‘disintermediated’ by the looming cryptocurrency threat.