JPMorgan Chase & Co chief executive Jamie Dimon has said cryptocurrencies will be controlled because anxiety around stablecoins and the asset class more broadly is rising in Washington.
“Blockchain can be real, stablecoins can be real,” Dimon said at the Institute of International Finance annual membership meeting, held online again this year. “No matter what anyone in the room thinks, nor what any libertarian thinks, nor what anyone thinks about it, government’s going to regulate it.”
A Treasury Department-led effort to regulate stablecoins favours policing them like lenders, Bloomberg News reported this month. Dimon echoed his long-held views on Bitcoin, but differentiated between his personal opinion and how New York-based JPMorgan would deal with it.
“I personally think that Bitcoin is worthless,” Dimon said. “Our clients are adults, they disagree, that’s what makes markets, so if they want to have access to buy yourself Bitcoin, we can’t custody it but we can give them legitimate, as-clean-as-possible access.”
Also in the crypto space, Citigroup chairman John Dugan said it would be appropriate for banks to face high capital requirements for keeping cryptocurrency assets on their balance sheets. Also, in the realm of cryptocurrencies, China’s Bank of Communications sees the rise of sovereign digital currencies as providing a fix to defects in the traditional monetary system, its president, Jun Liu, said.
The week-long IIF gathering began on Monday with finance leaders including JPMorgan Chase & Co.’s head Jamie Dimon and Barclays’s boss Jes Staley scheduled to speak.
Dugan said he would consider it “appropriate” for banks to face high capital requirements for holding cryptocurrency assets on their balance sheets.
New York-based Citigroup has begun facilitating cryptocurrency transactions for those clients interested in the space, Dugan said. Even so, the bank, much like many of its large rivals, does not currently hold such assets, he said.
“The bank regulators, the Basel committee, has come out with recommendations to have quite high requirements for any such things, and I think that’s appropriate,” he said. “The role that they’ve played with respect to ransomware has been very significant and very concerning.”
Bank of Communications sees sovereign digital currencies as providing a fix to defects in the traditional monetary system, such as excessive money supply and financial repression, Mr Liu said.
“The traditional way in building public trust in currency has changed,” Mr Liu said, differentiating China’s digital yuan from other cryptocurrencies. “Without sovereignty, digital currency cannot go very far.”
Last month, China banned all crypto transactions and vowed to root out the mining of digital assets. The government has been testing digital yuan. Shanghai-based Bank of Communications will introduce the digital currency to rural commercial banks, especially in the Yangtze River Delta region, and work with insurers to accommodate client needs, Mr Liu said.
Banks have kept resilient and authorities will continue to monitor and stand ready to deploy additional measures if needed, according to Pablo Hernandez de Cos, chairman of the international Basel Committee on Banking Supervision.