JPMorgan exec on Web3: “It would be quite short-sighted for financial institutions not to be very heavily involved in this technology” because they could be “absolute winners in the market.”
As investment in blockchain, Web3, and crypto startups is surging, banks have one key advantage over smaller, more nimble firms, according to JPMorgan’s top crypto exec: Trust.
JPMorgan is investing heavily in a wide range of blockchain projects – including tokenized stocks and bonds, a payment-information network, and its digital JPM Coin, which is currently handling about $1 billion in transfers a day.
While that’s a tiny amount compared to its total volume, it still complies with regulations like sanctions screening, anti-money laundering, and know-your-customer: “When we are doing that $1 billion, we are complying with all the rules that the $10 trillion complies with, and so all of our regulators across the world are satisfied with the approach,” Umar Farooq said during a panel hosted by the Monetary Authority of Singapore in the last week of August, adding that big banks ultimately have much more customer trust than their startup competitors.
While Farooq is obviously biased, his comments do come at a time of weakened consumer trust in crypto, as token prices have tanked, multiple bankruptcies have screwed small-scale investors, and hackers have stolen billions of dollars.
Separately, two JPMorgan execs with backgrounds outside traditional finance, recently appeared in a company YouTube video espousing the benefits of working there instead of a fintech: “ You get to work in kind of the inner guts of how the financial system works versus kind of scratching the surface and focusing only on the user experience.”