JPMorgan Chase and Co. is one the largest banking institutions in the U.S. as well as a well known global financial service. So when they say, the cryptocurrency holds a “risk” to their business and that they need to “adapt,” questions will rise in the minds of many.
During the annual 10-K filing with the U.S Securities and Exchange Commission, the bank took due note of cryptocurrencies as a “risk factor” on payment processing. Here is what they wrote on the matter:
“Furthermore, both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation. New technologies have required and could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies.”
It seemed like yesterday when Jamie Dimon, JPMorgan Chase CEO took to Bitcoins and related cryptocurrency and called them a “scam.” And now they are acknowledging the same as a viable threat to their institutions.
However, JPMorgan wasn’t alone seeing digital currencies and associated technologies as a threat to traditional banking services. In fact, names such as the Bank of America and Goldman Sachs also showed similar paranoia.
The banks expressed their worries regarding the adoption of digital currencies by the public as a preferred means of transaction, which itself will shake the traditional banking sectors from the core. Also, there is no doubt regarding the power of distributed ledger technology, and that the banks need to “adapt” to it.
On top of these concerns, the Bank of America also mentioned some concerns related to anti-money laundering and KYC regulations, both of which lack regulatory oversight in consideration to cryptocurrencies.