On Monday (April 4), Jamie Dimon, Chairman and CEO of JPMorgan Chase, spoke about Blockchain Technology and Decentralized Finance (DeFi) in a recent annual letter to his company’s shareholders.
In the “Investments and Acquisitions: Determining the Best Utilization of Capital and Assessing ROIs” section of the report, he said:
“We now execute fees for eight of the top 10 global big tech companies (three out of 10 companies five years ago) and continue to win business from strong competitors. We are constantly bringing to market and commercializing innovative products such as embedded banking; AI-driven fraud controls and prognosis; And account verification and programmable money in JPM currency.
“Decentralized finance and blockchain are real, new technologies that can be used in both public and private styles, with or without permission. JPMorgan Chase is at the forefront of this invention. Banks use a blockchain network called Link to share complex information, and we also use blockchain to move tokenized US dollar deposits through the JPM coin.
“We believe there are many benefits to modifying or enhancing a blockchain of contracts, data rights and other enhancements; However, for some purposes, it is currently too expensive or too slow to use.
“As the most innovative bank in the world and the safest and most secure bank, we expect to achieve double digit market share in payments over time.“
On February 15, JPMorgan published a research paper entitled “Opportunities in Metawares” and expressed his interest in metaverse by establishing a virtual presence in the Ethereum-powered virtual world.
JPMorgan’s 18-page report “Provides exciting opportunities for consumers and brands”, produced by Onyx, its blockchain division.
Here they explain what metavars are:
“Metawares is the seamless integration of our physical and digital lives, creating an integrated, virtual community where we can work, play, relax, exchange and interact. Metawares is still at an early stage in its evolution, and there is no single, all-encompassing definition of people returning. However, the themes of what metavars are and can be are emerging.
“One important thing is that there is not one virtual world, but many worlds that help people to deepen and expand social interactions digitally. This is done by adding a deep, three-dimensional layer to the web and creating real and natural experiences.“
Here are some numbers mentioned by the Onyx team to give everyone an idea of the opportunities that Metawares offers:
- Transaction – “Each year, $ 54 billion is spent on virtual goods, almost double the amount spent on music.“
- Socialize – “About 60 billion messages are sent daily to Roblox“
- Create – “GDP for second life was $ 650M in 2021, giving creators nearly $ 80M USD“
- Own – “Fungal tokens (NFTs) currently have a market capitalization of $ 41 billion“
- Experience – “200 strategic partnerships with The Sandbox to date, with the Warner Music Group set to launch a music-themed virtual world“
At the end of the report, they talked about the approach to metawares:
“The success of configuration and scaling in metawares depends on having a strong and flexible financial environment that allows users to connect seamlessly between the physical and virtual worlds. Our approach to payments and financial infrastructure will allow that dynamic to grow.
“We believe that the existing virtual gaming landscape (each virtual world has its own population, GDP, game currency and digital assets) has elements parallel to the current world economy. Our long-term basic capabilities in cross-border payments, foreign exchange, financial asset creation, trade and security, in addition to our level of consumer footprint, can play a key role in metawares.
“We are developing new emerging technologies to modernize infrastructure and business models, including tokenization and digital identification, but they are not limited.“
On the same day, JPMorgan announced that it had become the first major bank to enter Metawares by establishing a virtual presence called “Onyx Luge” in Decentral. According to The Black, the site “contains a portrait of the bank’s CEO Jamie Dimon, which turns out to be Onyx’s Christine Moyne jpeg image.” Moy is the global leader at Links, Crypto & Metawares at Onyx.
On January 15, 2021, during the JPMorgan Chase Q4 2020 revenue call, CFO Jennifer Beepsack and CEO Jamie Dimon spoke about the “fierce competition” over the next 10 years against blockchain technology and FinTech.
During the questions and answers section of the conference invitation, Charles Beabody, Chairman, Portal Partners, asked the following questions:
“good morning. I have two questions regarding FinTech, unfortunately, I was born into the wrong generation, so I need a lot of help. How much does FinTech depend on the world banking system? As I understand it, they lay on top of the pipes and on the plumbing of the banking system. Do you have any influence in the competitive world against the FinTech world?
“Then, secondly, I noticed that OCC gave the green light to banks to use public blockchain networks and staplecoins. Can you explain what is important to JPMorgan?“
JP Morgan Chase CFO responded:
“Oh, well, of course. That guide helps to issue staplecoins on a public blockchain. This does not affect the JPM currency. You should think that JPM currency is the tokenization of our customer deposit.
“This is obviously too early. We evaluate utility cases and customer demand. But it is still too late to see where this is going for us.“
And JPMorgan Chase CEO added:
“We already use blockchain to share data with banks, so we are at the forefront, which is good. The other question is about FinTech … look, first of all, they are very good competitors … they are strong. They are smart. Some effectively drive the rails. So we bank a lot of them. You know, we help them do what they want to achieve
“My opinion is that we are going to compete – we need to – and we need to look at what we can do better, or have done better, and separate things like that. So I’m sure we will compete, but I think we now face a whole generation of new, tougher, faster competitors, if they have not ridden on the tracks of JPMorgan, they can ride on someone else’s track
“I said before: everyone is going to get involved in paying. Some banks use white label, which makes FinTech competitors white label banks and builds any service on top of that we should be prepared for. I expect this to be a very tough competition in the next 10 years. I expect to win. So God help me.“
Beepady had a follow-up question:
“So do they need a banking system to complete their service or can they work fully outside the bank?“
“Well, most of them do for now, but I think it’s wrong to say it will always be. They get a bank license. Utah issues industrial licenses. Like I said, banks are white labeling. So, this is effectively the same thing
“If a FinTech company uses a white label bank to run their business, they are basically a bank. We do not know what the regulator will do, but we must assume that they are going to do it. Some people will find ways not to use the banking system they have made … I am not against it. Controllers may one day have an overview of it, but I care less about it. I’m going to worry about us.“
JPMorgan Chase CEO has long been a fan of blockchain technology, but not cryptocurrencies. In fact, he called Bitcoin a “fraud” in September 2017.
According to a Bloomberg report, on September 13, 2017, after calling Bitcoin “a scam,” Dimon called Bitcoin “worse than tulip bulbs.” If a JPMorgan trader starts trading in Bitcoin, Dimon said he will “remove them in a second”.
“If you’ve been to Venezuela or Ecuador or North Korea or some part of it or you’re a drug dealer, a murderer, or something like that, it’s better to do it in Bitcoin than in US dollars. So there may be a market for it, but it will be a finite market.”
In a January 2018 interview with Maria Partiromo of Fox Business, Dimon expressed regret for his earlier comments about Bitcoin and expressed his belief in blockchain technology:
“Blockchain is real. You can have crypto yen and dollars and stuff like that. ICO you have to look at individually. For me Bitcoin is always going to make governments realize about Bitcoin, it will be so big, I have a different opinion than other people. I was not so interested in the subject.”
In an interview with the Harvard Business Review (July-August 2018 issue), Timon spoke about crypto here:
“I have yet to say much about cryptocurrency. But this is not like gold or fiat coins. They are supported by the law, the police, the courts and so on. They are not copycat and have restrictions on them. On the other hand, blockchain is real. We are testing it and will use it for a lot of things.”
The opinions and opinions expressed by the author or any of the persons referred to in this article are for informational purposes only and are not financially, investment or other suggestions. Investing or trading in cryptocurrencies comes with the risk of financial loss.