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J.P. Morgan Chase & Co. JPM +0.16% Chief Executive Jamie Dimon told CNBC on Thursday that bitcoin is a “terrible store of value.”
The question isn’t whether the the bank accepts bitcoin, said Dimon. “The question is do we even participate [with] people who facilitate bitcoin,” he said on the sidelines of Davos.
Bitcoin is a digital currency that exists without a central bank. It is created through a process called mining, in which computers race against each other to solve cryptographic problems and win blocks of bitcoin. Bitcoin was thrust into the mainstream lexicon in 2013 as it surged from $13 in January 2013 to more than $1,000 late last year and was the subject of Senate hearings.
While bitcoin companies have attracted high-profile investors, they’ve encountered difficulties in securing bank accounts as banks remain skittish of the virtual currency and association with illegal activities. Indeed, Dimon alluded to media reports of bitcoin’s use in illicit endeavors in the interview.
Bitcoin has also been touted as a payment system that could revolutionize how money exchanges hands across the world. Digital payments are an area that have long attracted banks, as demonstrated by a patent application filed in December by J.P. Morgan itself for a “computer-implemented method of providing an anonymous payment.” A closer look at the patent application shows that it was for a patent initially awarded in 2000.
But once bitcoin is made to follow the same standards as other payment systems, Dimon said, that will “probably be the end” for bitcoin.
J.P. Morgan's Jamie Dimon says bitcoin is a 'terrible store of value' - The Tell - MarketWatch
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