In a Tuesday interview, referring to the crypto currency industry, JPMorgan’s Chief Executive Officer (CEO), Jamie Dimon said that it was the government’s responsibility to protect investors.
James Dimon is an American billionaire businessman and the Chairman and CEO of JPMorgan Chase – the largest of the big four American banks – since 2005. He was previously on the board of directors of the Federal Reserve Bank of New York.
During an interview with Fox Business Network, he shared his thoughts on the lessons learned from the collapse of crypto exchange FTX. Then he said “I called it a decentralized Ponzi scheme because people were just hyping it – hyping it, and hyping it – and they’ll write tons of books on this, the money that was stolen out of it, what people knew and didn’t know”.
Dimon said that cryptocurrencies had made people “hysterical,” and that it was the government’s responsibility to protect investors. “A lot of people got hurt [by crypto],” Dimon said. “These were retirees, grandmothers, lower-income folks, and it was a shame.”
“It should have immediately been put in some kind of regulatory framework so that there’s some investor protection,” he said, adding that regulators were starting to come up with safeguards, but now “the barn door has opened” for them to do so.
His recent and past interview differentiated his concern on crypto assets from his views on blockchain technology as a form of expediting financial transactions. It must be noted that his bank has worked on building out its own custom blockchain and token, JPM Coin. It aims to facilitate client payment transfers.
JPMorgan’s CEO also said that “the Federal Reserve may need to raise interest rates to 6% to fight inflation, which would be higher than most are expecting this year,” as reported by the Wall Street Journal.
The Fed raised its benchmark short-term interest rate aggressively last year, from near zero in March to just below 4.5% by the end of the year. And this year the officials have signaled their intention to lift the rate above 5%.
“The central bank should go to the 5% rate and then take a pause that would let bankers and economists see how the economy is reacting and if inflation is easing.” Dimon said the pause may disclose there’s more work to do.
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