Jamie Dimon doubled down on his longstanding antagonism toward cryptocurrencies on Wednesday as the JPMorgan Chase CEO told lawmakers that he viewed bitcoin and other digital coins as “dangerous” — likening them to a “decentralized Ponzi scheme.”
“I’m a major skeptic of crypto tokens, which you call currency, like bitcoin,” Dimon said during an appearance alongside other banking executives before the House Financial Services Committee on Wednesday.
“They are decentralized Ponzi schemes, and the notion that it’s good for anybody is unbelievable,” he said.
Dimon said that the unregulated crypto marketplace makes it easier for criminals to engage in illicit activity such as money laundering, theft, and sex trafficking.
“It is dangerous,” he said.
Dimon, whose net worth has been pegged by Forbes at $1.4 billion, has repeatedly denigrated bitcoin and cryptocurrencies, calling them a “fraud” and “fool’s gold.”
Last year, he recommended that investors put their resources into more reliable assets such as dollars or gold. He also urged the government to step up regulation of the digital coins.
Dimon, who assailed Democrats for urging an end to investments in oil and gas, said on Wednesday that he would encourage his clients to invest in “stablecoins” which would be pegged to the dollar.
He touted JPMorgan’s use of blockchain as well as the bank’s own coin that can be exchanged for dollars at a fixed rate.
“It can be moved just the way cryptocurrencies can be moved — stable value, very low cost,” Dimon told lawmakers.
Dimon also sounded the alarm on Wednesday over the state of the US economy, saying that Americans were getting “crushed” by record levels of inflation.
Mainstream financial giants on Wall Street have reluctantly come around to embracing cryptocurrency in recent years.
Last year, Morgan Stanley became the first bank to let clients trade crypto. It also started to invest its own money in the volatile assets.
Morgan Stanley long resisted dipping its toes into the crypto market, but senior bankers capitulated to pressure from agitated clients eager to gain access to the virtual currencies which at the time were minting newfound millionaires seemingly overnight.
In April, Goldman Sachs joined the fray when it began offering its first-ever lending facility backed by bitcoin.
The crypto markets are in the midst of a severe downturn.
Bitcoin’s value, which reached an all-time high of more than $64,000 in November, has plummeted to south of $20,000. The market capitalization of cryptocurrencies has fallen by two-thirds during that period — from a high of $2.8 trillion to just $930 billion.
Dimon’s peers in the banking industry told lawmakers that their financial institutions have no plans to finance crypto mining, the energy-intensive process for increasing the circulation of digital coins which has been blamed for exacerbating climate change.
Citigroup CEO Jane Fraser, Bank of America boss Brian Moynihan, and Wells Fargo chief Charles Scharf all pledged not to back mining operations when quizzed by Rep. Brad Sherman (D-Cal.), a crypto mining skeptic.
Lawmakers in the Democrat-controlled Congress have urged regulators to tighten the screws on crypto mining operations.