Back in September Jamie Dimon and JPMorgan were calling bitcoin a fraud.
The in February JPMorgan did an about face and published a research paper on cryptocurrencies which some have labeled the Bitcoin Bible. (Copy)
And now in its annual report it has listed cryptocurrencies as a potential threat to its business.
JPMorgan isn’t the only one. Read on to find out what JPMorgan is saying and what other companies say cryptocurrencies pose a threat to their business.
JPMorgan had this to say in its annual report:
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.
And…
Increased competition may negatively affect our earnings by creating pressure to lower prices.
You have to take these statements with a grain of salt. It doesn’t mean JPM will go out of business from cryptocurrencies anytime soon. But recognizing the threat is there is pretty significant.
Bank of America was the first company out to call cryptocurrency a risk as I recall. It warned that new technologies like cryptocurrencies could require substantial expenditures for them to stay competitive. They were also concerned digital currencies could hinder their ability to maintain AML regulation.
Recently Square labeled bitcoin as a risk as it pertains to complying with regulations. It’s also worried about unclear accounting rules for crytpos as well. At the same time CEO Jack Dorsey called bitcoin a transformational technology.
Another major financial institution that labeled cryptocurrencies a risk is Goldman Sachs. But keep in mind they’re an investor in Circle, who just bought Poloniex.
Two small banks, WesBanco and IberiaBank, have reportedly listed cryptocurrencies as a risk as well.
And most recently, Cardtronics, the largest operator of ATM machines, announced virtual currencies as threat too.
Overall, I agree that cryptocurrencies are a threat to all of these companies. It’s well known there’s been little innovation in financial sector for many decades. And cryptocurrencies have the power to put money back in the hands of the people.
What do you think?
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