In his annual letter to shareholders, Jamie Dimon, Chairman and CEO of J.P. Morgan, on the status of bitcoin and cryptocurrency regulations in the United States. At the beginning of the letter, Dimon calls 2020 a “strong” year for the banking institution despite the Covid-19 pandemic.
Dimon appears to have changed his stance, as have other executives in the banking sector, after making statements against Bitcoin and cryptocurrencies. In a section devoted to America’s inability to grapple with its past, he explains that the country has been “distracted” about its future.
Jamie Dimon, Chairman and CEO of $ JPM, publishes his annual letter to shareholders.
– J. P. Morgan (@jpmorgan) April 7, 2021
In this sense, Dimon points out three “serious problems”: shadow banking, financial information management and the legal framework for cryptocurrencies. The executive branch of J.P. Morgan urges regulators and financial system actors to take a more active stance, Dimon said:
The regulators have to decide what they want to include in the regulatory system – and what they do not want to include in the regulatory system (…). We need to recognize that the product is moving outside the regulated system when a regulated system has higher capital requirements than market requirements.
USA losing lead over Bitcoin?
The US banking system holds nearly $ 4 trillion in cash or Treasury notes. JP Morgan CEO wonders if the bank should not use this liquidity to “fuel economic growth”. However, he claims that there are many barriers preventing this capital “actually” reaching banks or the “wider” economy.
Therefore, he reiterates his argument that regulations in the United States must be “calibrated”. Dimon wrote:
This calibration will be one of the main factors in determining what ends up in the regulatory system – and what doesn’t. It’s a good balance. Too much capital and liquidity could potentially slow the economy and put further strain on the shadow banking system. Too little capital and liquidity could make banks riskier and more failing.
With regard to cryptocurrencies, several members of various regulators in the US, from SEC Commissioner Hester Pierce or former OCC Brian Brook, have recognized that “well” regulated products are an advantage for all economic players.
Dimon agreed, adding that regulated assets “generally” have more transparency, control and support.
In the USA, numerous institutions have applied for approval of an Exchange Traded Fund (ETF) for Bitcoin. In this way, institutional investors are hoping for exposure to the BTC.
If regulators continue to fail to see the growth of the crypto market, they could deepen the benefit that other countries like Canada appear to be consolidating in the region.
At the time of publication, Bitcoin is trading at $ 56,180, down 2.8% over the past 24 hours.
BTC with small losses on the 24-hour chart. Source: BTCUSD Tradingview