Just months after CEO Jamie Dimon warned that bitcoin, the world's largest cryptocurrency by market capitalization, was a "fraud," JPMorgan Chase & Co. (JPM) is launching a crypto strategy. The Wall Street bank has asked London-based Oliver Harris, a 29-year-old tech star, to explore the potential of digital money at its corporate and investment bank. (See also: JPMorgan CEO Dimon Regrets Calling Bitcoin a Fraud.)
Harris, who has been leading the bank's in-house fintech program for the past two years, will be tasked with identifying crypto projects for JPMorgan to develop. He will report to Umar Farooq, the head of blockchain initiatives at the bank and will also oversee the development of the firm's internal blockchain platform called Quorum, which has been rumored to be preparing for a spinoff.
Getting Serious About Cryptocurrency and Blockchain
In January, Dimon walked back his criticism of the cryptocurrency space, when he called bitcoin investors "stupid" and said they would "pay the price for it one day." The CEO, who once indicated that he would fire any of the bank's employees who were caught trading bitcoin, expressed optimism regarding the underlying blockchain technology in an interview with Fox in January. He added that he is "open-minded" about cryptocurrencies, if they are "properly controlled and regulated." In October, JPM announced a blockchain-powered system intended to "significantly reduce" the number of parties needed to verify global payments and cut transaction times from weeks to hours.
"Cryptocurrencies are real, but not in the current form," Daniel Pinto, co-president of JPMorgan told CNBC on May 16. The new initiative will help weigh risks and rewards of decentralized digital currency and the distributed ledger technology that underpins it it.
JPM is the latest of big banks to get more serious about the volatile cryptocurrency space. Earlier this month, Goldman Sachs Group Inc. (GS) recruited trader Justin Schmidt for a new bitcoin trading operation which will first offer forward products and potentially apply for regulatory approval to directly buy and sell the digital asset. (See also: Goldman Adds a Crypto Trading Operation.)