Since Bitcoin’s inception, top executives at JPMorgan have long been abundantly vocal about their disdain for cryptocurrencies. However, with the bank’s recent foray into the crypto sphere, it would appear that the world’s largest bank is now singing a different tune.
In a recent interview with CNBC’s Squawk Box, JPMorgan Chase’s Global Head of eCommerce Solutions Ron Karpovich acknowledged that while the bank is now utilizing the nascent technology behind cryptocurrencies with its new proprietary digital asset JPM Coin, he also stressed the necessity of traditional banks in the operation of crypto firms.
Affirming the traditional banking system’s unexpendable role in today’s payments industry, Karpovich underscored that the system is far too entwined with the world today that there really is no absolute way to circumvent it.
As Karpovich stated, stressing the inconsiderable profitability of the payments industry:
“Ultimately behind the scenes, they [crypto companies] are going to have to use a bank to move funds. There’s more partnership instead of competition in that space… When it comes to margins and capabilities, payments is never something that grows in margin, nobody wants to pay for a payment…so you need highly efficient and large players.”
When probed on how far the traditional banking sector is from potentially adopting digital currencies in the facilitation of payments, Karpovich emphasized that while he believes that there is a good chance that the banking industry will be leveraging on blockchain technology for processing payments, aside from relatively less expensive fees and moderately more expeditious transactions, the technology’s integration would have very little impact on consumers, noting that:
“I think ultimately you’ll find that the technology behind the scenes will be blockchain, I don’t know that you’ll notice anything as a consumer in that space. I think that you’ll still continue to use the payment type that you prefer, be that a wallet, a card, or a bank account.”
While JPMorgan has notoriously maintained its negative position on digital currency and the industry in general, the bank’s recent entry to the crypto sphere was expected, at least by most in the crypto community.
When asked about his opinion regarding the bank’s largely hostile attitude towards the nascent sector, Karpovich responded pointing out the difference between leveraging on blockchain technology and speculating on digital currencies.
Skirting previous criticisms made by JP Morgan CEO Jamie Dimon, Karpovich went on emphasizing:
“There’s a difference between trading a cryptocurrency that’s in the market that’s ubiquitous, versus using the technology to enhance your payment infrastructure.”
Regardless of JP Morgan’s current stance, the fact that global financial institutions are now increasingly pivoting to the crypto industry is a testament to how the technology’s massive potential to revolutionize the traditional financial system is now gaining worldwide recognition.