JPMorgan Says Cryptocurrencies Represent a Risk to Banks
The fact that several banks have criticized cryptocurrencies so far is no secret. Once again, JPMorgan Chase, one of the biggest banks in the US, has claimed that both digital currencies and the blockchain technology could end up causing disruptions in the banking system.
JPMorgan's annual report says that cryptocurrencies could disrupt banks
So, the statement was made by JPMorgan in its annual report which was published on February 27. Of course, the big bank's annual report was filed with the US Securities and Exchange Commission (SEC). In its annual report, the bank says that both digital currencies and blockchain technology could end up being disruptors to all the financial institutions on the market.
Because of cryptocurrencies, there are several risks to the banking sector, JP Morgan said in its filling:
“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. 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.”
JPMorgan has previously positioned itself against cryptocurrencies, through the voice of its CEO, Jamie Dimon. Dimon is a well-known critic of cryptocurrencies, as he actually previously claimed that bitcoin was a "fraud." At one point, Dimon went a bit too extreme and said that he will fire all bank employees who trade digital currencies. He has meanwhile made his approach a bit more neutral.
However, it is important to mention that JPMorgan is not the only bank which has issued some warnings with regards to the risks posed by digital currencies. Recently, Bank of America has claimed that cryptocurrencies and financial services that are based on blockchain could pose a risk on the bank's business model.
