Bitcoin might be the hottest topic in financial technology, but Jamie Dimon isn’t impressed.
“It’s just not going to happen…there is no government that is going to put up with it for long,” the CEO of JPMorgan Chase said about virtual currency at the Fortune Global Forum yesterday (Nov. 4), adding: “It’s kind of cute now, a lot of senators and congressmen will say ‘I support Silicon Valley innovation,’ But there will be no currency that gets around government controls.”
The “blockchain” technology that makes bitcoin possible, on the other hand, could be a potential game changer, Dimon admitted.
JPMorgan and 22 other major banks have recently partnered with R3, a blockchain startup, to study blockchain technology and possibility of idea of a shared, private ledger. Blockchain is essentially a shared database where people can exchange information—as well as virtual currencies like bitcoin, stock certificates, contract agreements, and even securities. For something like sending money across borders, using blockchain technology can make the process much faster and cheaper.
“If it is cheaper, effective, works, and secure, then we are going to use it,” said Dimon.
The IRS and the Commodities Futures Trading Commission (CFTC) both consider bitcoin a commodity, instead of a currency—essentially a piece of property you pay taxes on. Yet, more recently, government agencies outside the US have been more receptive of bitcoin as a currency, and not taxable.