Bank CEOs assembled before the United States House of Representatives Financial Services Committee on 10 April to give their spin on banking’s status quo following the 2008 financial crisis, including the position of cryptocurrencies and blockchain.

Rep. Warren Davidson’s view was that blockchain had found its place in addressing cybersecurity and transforming outmoded financial systems, but felt that regulation was still dragging behind other jurisdictions where progressive measures were being introduced to facilitate the blockchain industry.

A less accusative view than expected was expressed by Jamie Dimon. The chairman and CEO of banking giant JPMorgan Chase suggested that the bank was “supportive of cryptocurrencies as long as they are properly controlled and regulated”. It was noted that Dimon was one one of cryptocurrencies greatest detractors at one time and with the recent issuance by JPMorgan of its JPM coin showed a markedly different view, given prior comments elsewhere. Dimon’s latest spin is that blockchain can work over time, although he still felt that there was “no value behind it (cryptocurrency)” other than what the next person pays.

JPM Coin is the first dollar-backed cryptocurrency from a major bank. It was announced by JP Morgan Chase in February, 2019 as an institution-to-institution service. A permissioned blockchain variant of Ethereum called Quorum is used as the distributed ledger platform.

The Chairman and CEO of the Bank of New York Mellon, Charles Scharf, voiced a guarded approach regarding cryptocurrency’s position in the global financial system, suggesting:

“Cryptocurrencies are very early in their existence. They are not significant today to speak of in terms of being used as a real currency to move value, and so we are actively thinking about what we want to do. One of the biggest issues that we have relates to any money laundering and KYC.”

 

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