Jamie Dimon, the Chairman of JPMorgan Chase & Co, believes the US government will move to regulate the crypto sector. He said this during the week-long Institute of International Finance (IIF) annual membership meeting, which commenced yesterday.
In his speech, Dimon claimed that the mounting anxiety around stablecoins and digital assets would force the government to create regulations to govern the burgeoning industry.
According to him,
No matter what anyone in the room thinks, nor what any libertarian thinks, nor what anyone thinks about it, government’s going to regulate it.
Dimon went on to bash cryptocurrencies, saying he believes Bitcoin (BTC/USD) is worthless. He added that JPMorgan Chase’s clients are adults, and he does not object to them believing otherwise because varying points of view make markets.
While the bank does not offer custodial services for BTC, Dimon said it tries to give its clients legitimate access to the flagship cryptocurrency.
US government continues trying the best path to navigate the regulatory minefield
Dimon’s sentiments in the IIF meeting come after he said BTC is fool’s gold because the coin does not have any intrinsic value. He also pointed out that US regulators would soon start clamping it down. Nonetheless, Dimon believes that BTC will stay around for a long time.
While the banker has a negative stance on the crypto industry, the US government is searching for the best approach to rein in the asset class. These efforts have seen legislators like Senator Cynthia Lummis voice concerns over stablecoins, saying they need to be 100% backed by cash reserves.
According to her, stablecoins pose novel risks to the US economy. To this end, their cash reserves should be subject to regular audits. She also suggested that only depository institutions, money market funds, or similar vehicles should be allowed to issue stablecoins.
The Federal Reserve is also researching the feasibility of launching a digital dollar that would make stablecoins obsolete. However, plans of launching a digital dollar are still years away. According to the Chair of the Federal Reserve, Jerome Powell, the government should use the same rules that govern money market funds and bank deposits on stablecoins.
Although regulators are playing catch-up with the crypto space, it is worth noting that the US government is taking a different path from China, which recently imposed a blanket ban on crypto.
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