- JPMorgan Chase CEO Jamie Dimon says he doesn’t get the appeal of stablecoins, but he also can’t afford to stay on the sidelines.
- Last month, JPMorgan announced it will launch a more limited version of a stablecoin that only works for JPMorgan clients; a true stablecoin would presumably be more universally accepted.
- “We’re going to be involved in both JPMorgan deposit coin and stablecoins to understand it, to be good at it,” Dimon said.
- Citigroup and Bank of America executives have also said they would get involved.
JPMorgan Chase
CEO
Jamie Dimon
says he doesn’t get the appeal of stablecoins, but he also can’t afford to stay on the sidelines.
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It’s the message Dimon gave Tuesday when asked during an
earnings
conference call about whether his company, the largest and most influential U.S. bank, was exploring the payment technology.
Stablecoins, as the name suggests, are a type of cryptocurrency designed to maintain a steady value that are usually pegged to a fiat currency like the U.S. dollar. Last month, JPMorgan
announced
it will launch a more limited version of a stablecoin that only works for JPMorgan clients; a true stablecoin would presumably be more universally accepted.
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“We’re going to be involved in both JPMorgan deposit coin and stablecoins to understand it, to be good at it,” Dimon said. “I think they’re real, but I don’t know why you’d want to [use a] stablecoin as opposed to just payment.”
Dimon, 69, is one of the most vocal
opponents
of certain cryptocurrencies like bitcoin. But his bank is a juggernaut in the global payments industry, helping move nearly $10 trillion daily, and so it makes sense that they would explore stablecoins at a time when the regulatory
framework
for the technology has opened up.
Failing to do so could cede ground to fintech players who are looking to recreate elements of the regulated financial ecosystem, Dimon said on Tuesday.
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“You know, these guys are very smart,” Dimon said of his fintech competitors. “They’re trying to figure out a way to create bank accounts, to get into payment systems and rewards programs, and we have to be cognizant of that. And the way to be cognizant is to be involved.”
Stablecoins could offer a potentially faster and cheaper form of payment over traditional banking rails including ACH and SWIFT, which are decades-old systems that typically take days to settle.
Citigroup
executives said Tuesday that the bank was “looking at the issuance of a Citi stablecoin” among several ways to play in the space. The biggest opportunity is around tokenized deposits and in providing custody for crypto assets, they said.
Bank of America
CEO Brian Moynihan has also
said
his firm would get involved in stablecoins.
One way could be for traditional banks to collaborate through the jointly owned Early Warning Services. That would be similar to the way they banded together to offer Zelle for instant peer-to-peer payments as a way to defend turf against
PayPal
and
Block’
s Cash App.
When asked on Tuesday about a possible collaboration among banks, Dimon declined to give a specific answer.
“That’s a great question, and we’ll leave it remaining as a question,” Dimon said. “You can assume we’re thinking about all that.”
With reporting from CNBC’s Jesse Pound
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