In ancient Greece, the comedic mask (called Thalia) and the tragic mask (called Melpomene) were worn by actors to easily and clearly convey the exact emotions of the actors’ character to audience members. The masks made the actors’ intentions unmistakable and understandable. If an actor tried to wear both masks at the same time, the intentions, motivations, and message would be confusing, unclear, and ambiguous.
Such is the case with recent conflicting testimony to U.S. lawmakers from Jamie Dimon, who leads the largest bank in the U.S. – JPMorgan Chase. Testifying before members of the U.S. House Committee on Financial Services last week, Dimon talked from both sides of his mouth regarding cryptocurrency and investors.
“My own personal advice to people is stay away from it. That does not mean the clients don’t want it. This goes back to how you have to run a business. I don’t smoke marijuana but if you make it nationally legal, I’m not going to stop our people from banking it.”
“We are debating should we make it available in some way, in a safe way, that people can buy and sell it to put it in their financial statements and balance sheets, but my own personal view, it’s nothing like a fiat currency. It’s nothing like gold. Buyer beware.”
His comments are very interesting because very few individual investors have “…financial statements and balance sheets…” He clearly seems supportive of crypto investing for institutional investors, but not for the small investor.
“I don’t tell people how to spend their money, regardless of how I might personally feel about something,” said Dimon to committee members.
Based on his own testimony, Dimon wants it both ways. He doesn’t want retail investors to flee to crypto assets, abandoning the banking middlemen who require transactional fees, overdraft penalties, minimum balance requirements, fee-based checking, ATM withdrawal fees…. etc. While he does want to offer big investors access to cryptocurrencies, blockchains, and Stablecoins – as well as the hefty processing fees JPM is likely to impose upon big investors for those types of crypto transactions.
Dimon’s position is a confusing two-faced posture that is ignorantly hypocritical at best or intellectually dishonest at worst.
Conversely, other massive banks are providing clear directives to both small and large investors alike. Investment banks Goldman Sachs, Morgan Stanley, and Wells Fargo have recently stated their intentions to roll out blockchain-based technologies as well as limited access to cryptocurrencies in the near future. While Bank of America and Citigroup acknowledged that they’re still in the exploratory phase as they evaluate options.
Not JPMorgan Chase.
Dimon says “yes” to big investors, while he’s seemingly saying “no” to small investors when it comes to offering access to crypto assets. To top it off, Dimon told lawmakers that the crypto space requires government oversight and regulation – which flies in the face of cryptocurrencies’ foundational principles of decentralization and peer-to-peer transactions.
“I do think that eventually the regulators who are a day late and a dollar short should be paying a lot more attention to the future, like payment for the order flow, high-frequency trading, cryptocurrency, and put a legal regulatory framework around it.”
Either way, Dimon’s dramatic doublespeak to congressional leaders gives JPMorgan customers good reason to both laugh and cry in the truest theatrical sense.
On the Flipside
- Crypto investors should not be surprised to see reluctance from major banks and financial institutions adopting cryptocurrencies, since cryptos have the potential to make banks obsolete with staking, DeFi, peer-to-peer loans, etc.