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Government will control cryptos, says CEO of bank bailed out by government

Did JP Morgan Chase & Co. CEO Jamie Dimon really have a change of heart when it comes to bitcoin?

JP Morgan Chase & Co. CEO Jamie Dimon showing how he’d wring the neck of any one caught trading bitcoin on one of his trading desks. (via Wikipedia).

Just four months ago, Dimon called bitcoin a “fraud” and threatened to fire any of his traders caught trading the cryptocurrency on the company’s dime. “Someone is going to get killed,” he warned. Dimon even went so far to mock his own child, saying at CNBC’s Delivering Alpha conference, “My daughter bought bitcoin, it went up and now she thinks she’s a genius.”

Since then, bitcoin has more than quadrupled, a return so lucrative that most traders would gladly go short their souls and take a punch in the jaw from their CEO as he escorted them out the door if they could get a glimpse of it.

Thus, Jamie Dimon: 0, Jamie Dimon’s daughter: +300%.

So when Fox Business News’ Maria Bartioromo interviewed Dimon père on Tuesday, it seemed he may have warmed up to cryptocurrencies.

JPMorgan Chase CEO Jamie Dimon regrets saying Bitcoin is a ‘fraud,’ but still isn’t interested in it,” shouted the Fox Business headline because all Fox Business headlines shout.

Okay, so that’s not quite warming up. Actually, that’s like the school bully in every 1990s teen comedy saying, “Yeah, the nerdy girl with glasses turned out to be the hottest woman I’ve ever seen but I still won’t ask her out because football!”

As Fox reported:

“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 an exclusive interview with FOX Business’ Maria Bartiromo. “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.”

Huh? The governments are going to… what? What does that even mean?

And hey, Jamie, it takes days for banks to clear some payments now and here you have a technology that could speed up your entire business and you’re not interested in the subject?

“Streaming video is real but the government regulates the internet as it gets really big and I just have a different opinion than other people. I’m not interested in the subject at all,” said most of the owners of VHS rental companies several years ago.

Luckily, Dimon cleared it up at a forum set up by Fortune during the JP Morgan Care Conference in San Francisco.

Readers should view the comments to get the full tone of derision and sarcasm.

“It’s just not going to happen, you’re wasting your time. When the DoJ [Department of Justice] calls someone up and says, ‘This is against the laws of the United States and if you do it again, we’ll put you in jail,’ it’s over. This is my personal opinion: There will be no real non-controlled currency in the world. There’s no government that’s going to put up with it for long. It’s kinda cute now. You know, a lot of senators and congressmen say, ‘I support Silicon Valley innovation.’ There will be no currency that gets around government controls.”

[Editor’s note: Jamie Dimon’s impression of elected representatives of the people who gave him their tax dollars to save his bank sounds similar to Foghorn Leghorn.]

At that point, the moderator asked, “Anybody here want to take an opposite view?” but no one dared to. Dimon continued:

“The technology will be used. It may even be used to transport currency but it will be U.S. dollars.”

“But digital currency will be stopped,” the moderator interjected.

“Yes,” said Dimon, who runs a company that mostly transacts in currencies not backed by hard assets. “Virtual currency, where it’s called a ‘bitcoin’ instead of a ‘U.S. dollar’ these things [he may be talking about the blockchain here] may be very well for cheap transfers of money.”

And it may well be that dollars will one day be transported using blockchain technology. However, having such a definitive prediction on what the government will do to cryptocurrencies after backtracking on calling one a “fraud,” well!

JP Morgan Chase & Co. took about $25 billion in the Troubled Asset Relief Program (TARP) a decade ago when the financial crisis plunged the world’s economies into recession and led to global political upheavals. Oh, and one of its biggest counterparties, AIG, got over $180 billion in bailout money from Uncle Sam when it found itself on the wrong side of credit default swaps so there was that indirect bailout. Sure, JP Morgan subsequently repaid but Dimon insists the government forced them to take it because it would stabilize the financial system that… Oh, never mind. We know where this is going.

 

Lawrence Lewitinn, CFA is editor in chief of Modern Consensus. Disclosure: Lewitinn owns no cryptocurrencies in his portfolio.