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JP Morgan finally reveals the actual reason for consistent criticism of virtual currencies

Mar 01, 2018 Posted /  5576 Views

JP Morgan  finally reveals the actual reason for consistent criticism of virtual currencies

Bigger Banks don't like cryptocurrencies, and they have been continuously vocal about it. So, what is the very reason that they are slowly being considered more of headaches for the company? JP Morgan has now for the first time finally opened up entirely and asserted in its annual report that cryptocurrencies are a threat to their business, which is why they don't favor transactions in virtual currencies.

If you have been following crypto-news lately, you might know that JP Morgan has been featuring in the industry news for the constant criticism of the digital currencies. The company has mostly shared a negative stance as its CEO Jamie Dimon called Bitcoin as a fraud and now it has been made clear that the company considers it a threat and not a fraud.

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This week on Tuesday, Fortune magazine disclosed that JP Morgan had released their annual report and in the report, the bank has acknowledged that cryptocurrencies are "Risk factors" to their business. This is the first time when JP Morgan openly acknowledged the risks virtual currencies posed to their business. Nonetheless, the bank had also withdrawn from saying that Bitcoin is a fraud and encouraged the buyers for Bitcoin ETFs (Exchange-Traded Funds).

“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies such cryptocurrencies, that require no intermediation,” JP Morgan recorded in its recent report.

It is noteworthy that JP Morgan is not the first major American bank to explicitly declare the risk posed by the virtual currencies to their business. Bank of America also made comparable comments last week in their annual report where they stated that they perceive a risk of losing clients to developing technologies and mechanisms of exchange such as cryptocurrencies.

This sums up to say most banks either stopping or limiting their clients from trading cryptocurrencies or using credit cards for purchases under the pretext of “protecting” customers or preventing money laundering might be doing so to save the future of their business to stay relevant in the financial space. Recently, State Bank of India’s head of Innovation also commented on the question by stating;

“By 2030, traditional banking services could cease to exist with Blockchain. All services of banks can be replaced by blockchain.”

Many banks around the globe are experimenting with Blockchain solutions, the underpinning for the most significant cryptocurrencies. However, most have averted from the question of working with virtual currencies as it gives more power in the hands of people rather than banks. Nevertheless, the small banks have come forward in many parts of the world and stated that cryptocurrencies are the future.  

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Tags: JP Morgan virtual currencies Cryptocurrencies

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