The JPMorgan CEO explains why he thinks the government will crack down on bitcoin and other virtual currencies before they get big.
Jamie Dimon isn’t on board with bitcoin.
Speaking on Wednesday at the Fortune Global Forum, the CEO of JPMorgan Chase JPM said that the market for the virtual currency isn’t large and it would be stopped by the government before it ever got to that point. Dimon said despite the fact that bitcoin is getting some lip service in Washington, as politicians try to say they support Silicon Valley innovation, he thinks eventually there will be a crackdown.
“Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”
Just the same, Dimon said JPMorgan had established a study group to examine the blockchain technology used to record bitcoin transactions.
“Blockchain is like any other technology,” said Dimon. “If it is cheaper, effective, works, and secure, then we are going to use it.”
Right now, the verdict on blockchain tech is mixed, Dimon said. He added that the loan market could be a good candidate for blockchain because there is a lot of paperwork involved in that line of business and that transactions can take 20 days to close. But he said in other areas of financial markets, like trading stocks, the block chain probably wouldn’t offer significant improvement.
That said, Dimon made it clear that bitcoin, or any other virtual currency, would never be a major competitor to the U.S. dollar. “The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”