JPMorgan Anticipates Minimal Downside for Cryptocurrency Markets in the Short-Term
JPMorgan Blockchain Head: 'Most of crypto is still garbage and lacks a use case'
JPMorgan wants to bring tokenized assets worth trillions of dollars to the DeFi platform
According to Umar Farooq, the head of JPMorgan's digital assets division, the majority of cryptoassets on the market are "junk," and there aren't many real-world uses for them now.
In a panel discussion on Tuesday at the Monetary Authority of Singapore's Green Shoots Seminar, Farooq said that because regulation has not kept up with the expanding industry, many conventional financial (TradFi) institutions are hesitant to join engaged.
In addition, he stated that most crypto assets, with the exception of a handful, lack utility:
“Most of crypto is still junk actually, I mean with the exception of I would say, a few dozen tokens, everything else that has been mentioned is either noise or frankly, is just gonna go away.”
“So in my mind, the use cases haven’t arisen fully, and the regulation hasn’t caught up and I think that’s why you see the financial industry, in general, being a little bit slow in catching up,” added Farooq, who serves as CEO of JPMorgan’s blockchain unit Onyx Digital Assets (ODA).
The JPMorgan executive additionally contended that the industry hasn't developed sufficiently to be used at scale to support high-value "serious transactions" between TradFi institutions or to host products like tokenized deposits (an existing bank deposit held as a liability against depository institutions).
Farooq asserted that at this point, crypto, blockchain, and the larger Web3 trend are primarily serving as a platform for irrational speculation:
“You need all of those things to mature so that you can actually do things with them. Right now, we’re just not there yet, most of the money that’s being used in Web3 today, in the current infrastructure, is for speculative investment.”
While the banking behemoth has become more accepting of cryptocurrencies over the past few years, its main attention is on blockchain technology and how it can be used to enhance TradFi services in particular.
JPMorgan had tested tokenized collateral settlements using its own private blockchain, according to a Cointelegraph report from May. Two of its entities transferred a tokenized representation of money market fund shares owned by Black Rock Inc.
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