JPMorgan Chase CEO Jamie Dimon feels threatened by the crypto space disrupting payment systems, said Shark Tank host and millionaire VC Kevin O’Leary, speaking at a Converge22 panel on Sept. 28.
O’Leary made his comments after Dimon said he was a “chief skeptic” of “cryptocurrencies she calls a currency like bitcoin,” calling them “decentralized Ponzi schemes” in testimony before the US Congress last week.
O’Leary explained that friction is one of the main problems in the traditional financial system, which is how banks profit from transaction fees, adding that stablecoins could lead to lower fees worldwide. He said:
This is not about speculation in asset prices. It is about lowering the costs of how the world’s economies work. More transparent, productive, controllable and regulated, but less expensive. So, does Jamie Dimon feel threatened? You are right. It’s a big part of how he makes money.”
Regarding the regulatory framework in the US, the venture capitalist explained that sovereign wealth funds and pension funds are awaiting regulation before adding digital assets to their portfolios, noting that:
If you’re a sovereign wealth fund or an oil-rich country, you can make a quarter of a million dollars in 12 hours. The only place on earth you can paint is the S&P. The only way to do this is to comply with SEC rules. They will never take action against the Securities and Exchange Commission until these rules are in place.”
According to O’Leary, a regulatory shift in the United States’ approach to digital assets will lead to a 10% increase in all crypto assets overnight. US lawmakers are working on a bill to regulate stablecoins, which could be approved by the end of the year.
Stablecoins are a class of cryptocurrencies that attempt to provide price stability for investors, either by backing them with certain assets (such as the US dollar) or by using algorithms to adjust supply based on demand.