JPMorgan & BofA Admit “Disruptive Threat” Of Cryptocurrency To Their Business

This report was originally published by Tyler Durden at Zero Hedge

Having explained why central banks are so nervous about cryptocurrencies, it seems the rest of the banking sector is finally admitting the real driver behind their disdain for digital currencies – they are competition and an existential threat.

As CoinTelegraph’s Molly Jane Zuckerman reports, J.P. Morgan Chase has added a segment on cryptocurrencies to the “Risk Factor” section of their 2017 annual report to the US Securities and Exchange Commission (SEC), filed yesterday, Feb. 27.

The annual report mentions cryptocurrencies under the “Competition” subsection when describing how new competitors have emerged that threaten J.P. Morgan’s operations:

“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.”

The report notes that these new technologies, evidently including Blockchain, although they don’t mention it by name, “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.”

This competition could potentially “put downward pressure on prices and fees for JPMorgan Chase’s products and services or may cause JPMorgan Chase to lose market share.”

J.P. Morgan Chase CEO Jamie Dimon had made waves back in September 2017, when he called Bitcoin (BTC) a “fraud” and threatened to fire any employee that traded BTC on company accounts. Since then, Dimon has backtracked slightly, telling a Cointelegraph reporter at the Davos World Economic Forum that he is not a “skeptic” on cryptocurrencies.

In the beginning of February, an alleged internal report from J.P. Morgan Chase referred to cryptocurrencies as “innovative” and “unlikely to disappear”, also noting cryptocurrency’s potential to be successfully applied to payment system areas that are traditionally problematic or slow, such as cross-border payments.

JPMorgan is not alone, as TruthInMedia.com’s Brendan Weber reports, in Bank of America’s new annual report filed with the U.S. Securities and Exchange Commission (SEC), the corporation largely reflected internally about a number of economic, geopolitical, and operational risks faced.

One of those stated risks is surrounding the increased adaptation of cryptocurrencies, which could have negative effects on the corporation’s earning potential.

In addition, technological advances and the growth of e-commerce have made it easier for non-depository institutions to offer products and services that traditionally were banking products, and for financial institutions to compete with technology companies in providing electronic and internet-based financial solutions including electronic securities trading, marketplace lending and payment processing. Further, clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies. Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us.

Increased adaptation of cryptocurrencies also had Bank of America admitting that it may need to make “substantial expenditures” to compete with these rising technologies:

In addition, the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services as we grow and develop our internet banking and mobile banking channel strategies in addition to remote connectivity solutions.

Bank of America might have already taken action to help counter these technologies by banning cryptocurrency transactions on their credit cards.

Additionally, the document stated concerns besides those directly affecting earning potential; they noted that emerging cryptocurrencies could impact Bank of America’s compliance with anti-money laundering regulations:

In addition to non-U.S. legislation, our international operations are also subject to U.S. legal requirements. For example, our international operations are subject to U.S. laws on foreign corrupt practices, the Office of Foreign Assets Control, know-your-customer requirements and anti-money laundering regulations. Emerging technologies, such as cryptocurrencies, could limit our ability to track the movement of funds. Our ability to comply with these laws is dependent on our ability to improve detection and reporting capabilities and reduce variation in control processes and oversight accountability.

Even though cryptocurrencies were a small mention within the entire report, its brief discussion indicated that the company is both aware of and reacting to the further potential impacts of cryptocurrency.

Here’s Why Banks Hate Cryptocurrencies

This report was originally published by Tyler Durden at Zero Hedge

Banks like to pretend that they’re so much more established and secure than the world of cryptocurrencies, but as anybody who pays close attention to the headlines would know…that’s just not the case…

Setting aside all of their rhetoric about embracing the blockchain, banks have mostly avoided or opposed cryptos (Goldman Sachs, sensing the opportunity for profit, is one notable exception), often citing their volatility and the ease with which they can be used to launder money as qualities that disqualify them from being taken seriously (though, as we recently witnessed with the US dollar, perhaps banks need to rework this volatility argument a bit).  Even yesterday’s announcement of the first criminal charges against a cryptocurrency trader pales in comparison to the many, many crimes that banks (or even one bank) have settled allegations of. The real answer to why the banks’ dislike cryptocurrencies is probably because they feel threatened. The recent selloff notwithstanding, the rise of cryptocurrencies has continued unabated, despite the efforts of some of the most powerful governments on Earth, while the concept is still very young, it does have potential to shake up the aging fiat system. In order to understand the race between the banks and cryptocurrencies, we developed a visual to see just how “David” is comparing to “Goliath.”

Using data from Yahoo Finance and CoinMarketCap.com, HowMuch.com‘s data team developed a visual that compares the market caps between some of the world’s largest banks and the largest cryptocurrencies. On the left blue column, there are four banks listed from largest to smallest market caps: JPMorgan Chase, Bank of China, Goldman Sachs, and Morgan Stanley. Conversely, the right red column features the total cryptocurrency market, Bitcoin, Ethereum, Litecoin, NEO, Ripple, Bitcoin Cash, Cardano, and Stellar. The larger the circle, the bigger the market cap.

Total Crypto Market Exceeds Size Of JPMorgan; Banks Fight Back In Attempt To Slow Growth

After an extraordinarily volatile (even for bitcoin) start to the year, cryptocurrencies are rallying once again, with bitcoin breaking above $10,000. As of Feb. 16, 2018, the crypto market had a market cap of $470 billion – larger than the size of the United States’ largest bank, JPMorgan Chase.

Bitcoin’s market cap alone is comparable to Bank of China’s. The second largest cryptocurrency by market cap, Ethereum, is comparable in size to Morgan Stanley. It is stats like these that have the global banking sector worried that cryptocurrencies are on track to make a serious impact on their operations.

One of the most recent efforts to help slow the pace of crypto growth were announcements from several banks saying that customers could no longer purchase digital currency with their credit cards. Berkshire Hathaway’s Charlie Munger has called Bitcoin “totally asinine” and Warren Buffet has said he would “buy a five-year put on every cryptocurrency.”

Overall, cryptocurrencies are seeing their size and value top even some of the largest financial institutions in the world. This has caused banks to fight back and attempt to slow their growth. However, even banks clearly don’t know what they really want. After JPMorgan CEO Jamie Dimon famously declared Bitcoin a “fraud”, it is interesting to now see a report published by the investment bank that calls Bitcoin-based ETFs the “holy grail for owners and investors.”

And should the bitcoin ETF become a reality, do you really think banks will turn down those lucrative fees?

What do you think?

Jamie Dimon: ‘Cryptocurrencies Will Soon Be Under Government Control’

In the ‘not so shocking’ news of the day, governments want to regulate and control cryptocurrencies. Even Jamie Dimon, the CEO of JP Morgan Chase is saying that very soon, governments will have complete control of all cryptocurrencies.

The cryptocurrency “won’t end well,” Dimon told an investor conference in New York last year, as Bloomberg noted, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.” Dimon became the laughing stock of the crypto world when he came out raging against bitcoin and the blockchain.

According to The Free Thought Project, Dimon’s dislike of cryptocurrencies is well known, but he seems to waver a bit here and there on how much he loathes digital currency. On Tuesday, however, he seemed to have changed his mind. During an interview with Fox Business, he left viewers with an ominously cryptic message (pun intended) on how the government will control bitcoin, and said he “regretted” calling bitcoin a “fraud.”

“The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually,” Dimon said in the exclusive interview with FOX Business. However, after he somewhat apologized for slamming bitcoin, Dimon not so subtly hinted that he knows something about the government and how they can grab control of bitcoin. “The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.”

When asked what he thought about the future of bitcoin during an interview with Fortune, Dimon said, “It doesn’t matter, it’s just not gonna happen,” before claiming that the government will make it illegal and begin jailing people for it. “When the DoJ calls someone up and says that’s an illegal currency and it’s against the laws of the United States and if you do it again—we’re gonna throw you in jail.”

Dimon went on to predict that cryptocurrencies will all be government controlled and if someone uses a currency the government has banned, they will be punished.

“This is troubling. For many reasons,” says Joe Joseph of The Daily Sheeple. “But there’s one in particular that I’m keying in on. And it’s one that you may not have thought about.”

 “I gotta tell you,” Joeseph continues. “Cryptocurrency scares me. Not so much the little guys, but the biggies. The Bitcoin. The Ethereum and whatnot. Because once they get too big, they become targets for the government. Not just because it undermines national currency, which thereby…by default, undermines national security, but because it is an untapped form of revenue, that I believe, the government is gonna come out and seize.”

Maybe that seems unlikely, but in the realm of government, nothing is impossible anymore and we have very few actual human rights left at this point.

The good news is that even if governments try to control one currency, others will rise in its place and as long as this widescale collaboration and coordination among blockchain users exist, decentralized money will win. The money changing bankers have had their go at the helm—and we’ve seen the massive death and destruction facilitated by it—now, it’s time for the rest of humanity to have their turn. –The Free Thought Project

 But in the shadows, lurks the government.  It’s happened before, and it could happen again: the government had the power to take from you what they want, and they can wipe you out!