Last week, JP Morgan announced the rollout of their own cryptocurrency: JPM Coin.
This should send shivers down the spine of every financial institution exec interested in operating a financial institution beyond the next 10 years, but still unengaged in the cryptocurrency movement or its impacts on the industry.
If you're in the above bucket, you've just been conned and cornered!
Those of you who even remotely read up on cryptocurrency news and current events in 2017 or 2018 know the Internet was a sea of 'facts,' 'stats,' 'knowledge,' and 'deeply researched and data-driven predictions' about the future of bitcoin (and other cryptocurrencies).
Whatever opinion or perspective a person fancied, a quick Google search or troll of YouTube would surely produce the conclusive and convincing evidence to support a 'sound' next move in the cryptocurrency market!
That's just one of the perks of such an exciting, new, and (as of yet) unimpeded space. People will find ways to hustle it! The plethora of voices will surely shout out through the outlets of the interweb to broadcast the various interpretations of the new FinTech gospel!!
Amidst the myriad of voices from the wilderness in 2017 and 2018, a few notable names stood out.
John McAffee (and his now infamous $1m d!*ck line prediction ...), Elon Musk (and his reserved optimism around the potential positive impacts of cryptocurrency), The Winklevoss Brothers (and their failed attempts at yet another get-rich quick scheme around Bitcoin ETFs), Charlie Lee (and his plans to position LiteCoin as the fast/secure/cheap solution for merchant payments on Crypto), etc.
However, none was more consistently vocal and constantly contrarian than JP Morgan's CEO, Jamie Dimon.
Dimon, like a rebellious adolescent in denial of the impending demise of his current comfortable identity and safe worldview, perpetually pounded the web with degrading, debasing, disruptive, and (frankly) ridiculous comments about the future of Crypto.
Thanks to the efficient functioning of our 'unbiased' media outlets, chances are (as a financial institution exec) you consumed Dimon's distractions more than a few times, and the other above data points and opinions scarcely, if at all. Dimon enjoyed frequent coverage on CNBC, MSNBC, Bloomberg, etc., as he bombastically predicted Bitcoin's doomed fate to be an eventual total collapse and declared it would was a "ponzi scheme" destined to become perpetually irrelevant within our financial services landscape (saying the same of cryptocurrency in general).
It's almost like he didn't understand the technology, or his industry; or, he had ulterior motives.
A year later, in 2019, the world is learning his strategies were nothing short of genius, and evil.
Here are the three things you need to know about the evil genius of Dimon and his JPM Coin:
1. While he disparaged Bitcoin, he effectively drove institutional/consumer interest and confidence into repeated retreats in 2018 ... creating some convenient "buy" opportunities along the way for JP Morgan...
2. At the same time he was (as we now know) directing his resources to develop an internal infrastructure to offer JPM Coin, JP Morgan's proprietary 'digital currency' ...
3. Having convinced his competitors of the fundamental flaws and irrelevance of cryptocurrency, he's now positioned without peer as the first and leading major financial institution into the crypto space (but you should also take note of what TD Ameritrade is doing!).
So, you're on the outside looking in ... it's okay, the door hasn't slammed shut (yet)!
First, JPM Coin isn't a real cryptocurrency. It falls into a class of (questionable) blockchain/"crypto" projects which are not truly disbursed in nature (which is a key criterion in the space of autonomous, democratized, digital money). JPM Coin is still largely (if not entirely) centralized under the control of a single institution/interested party. Wanna know more about how this impacts you, especially as a local/community financial institution? Let's talk.
Second, JP Morgan and Dimon don't appear to have any immediate plans to issue an actual currency (which would, of course, technically compete with their friends at The Fed); rather, they appear to be positioning themselves to fend off foreign intruders in the inter-institution funds movement and payments/settlement space. Not sure why this is impactful to you? We should talk.
Third, unless you're planning on staking your institution's claim as a key player in centralized banking inter-institutional funds settlement in the digital currency era, you don't need to build your own cryptocurrency. What you do need is a strategy to maintain your position and value proposition with your customer/members as they embrace commonplace cryptocurrencies already impacting your deposit/transaction revenue streams. If you want your own local digital currency for some other top secret and profitable project, we and our partners already have solutions for that, which are conveniently compatible with your current core and core business plan (and unlike Dimon's opportunistic denialism, we realized this stuff was going to impact your future way back in 2011!).
Here's our final analysis on JPM Coin and its impact on your financial institution and the future of money: if one of the largest financial institutions in the world pulls an 'eat crow about face' on whether crypto is a factor in the future of money movement and financial services, it's probably time for you to take the tech seriously and start figuring out how it fits into your road map.
Or, you could just keep mindlessly repeating 'news' stories about how Bitcoin was worth almost $20k in December 2017, and is only worth $3800 now ... and see how that pans out!
We're here to help.
Free Consulting of the Day: if you're not following the John McAfee d!*k line prediction, you should be. It's going to get interesting ... if not simply entertaining. It might prove to be the upside to an economic downturn in 2020!!!
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