JPMorgan Chase’s head of blockchain, Umar Farooq, said he recognizes the potential of digital currencies, but added there are still a lot of problems that need to be addressed.
“I think we all believe blockchain [is] ‘good.’ I wouldn’t’ go as far to say cryptocurrencies [are] ‘bad.’ I would say cryptocurrencies have issues. I think we need to figure out how those issues get solved,” he told Yahoo Finance’s Editor-in-chief Andy Serwer during the summit.
According to Farooq, one of the main issues faced by the cryptocurrency community is money laundering. The banking industry and regulators, he said during the talk, understand the potential of virtual money, but they have to solve the problem of money laundering and make sure they know who the customer is.
“We think cryptocurrencies need some evolution,” Farooq noted.
Speaking about the blockchain technology, he said JPMorgan doesn’t see blockchain as a threat to its business.
“I would say blockchain will have a radical impact on some of our businesses because some businesses are fundamentally geared toward putting people together, providing the trust between parties. And some of those things will obviously radically change as blockchain becomes some of that underlying infrastructure that provides and distributes trust.”
Farooq believes there is an important role for more traditional banks in the cryptocurrency sector.
“People will find there is always a need for a trusted advisor in the mix. And whether that becomes a role of [us providing] the infrastructure or whether we become someone who facilitates the data exchange and the data layer and the standards, there will always be a role. I don’t think it’s an existential threat in the short term,” he said.
Farooq’s comments, however, are quite different from those of the bank’s CEO, Jamie Dimon, who previously shared his negative position towards the digital currency. Last year, the bank’s executive called bitcoin a “fraud” and claimed that any employee found trading with crytocurrency would be fired for being “stupid.”
Still, it seems like Dimon has changed his opinion about the virtual currency. In a recent interview on Fox Business, he said he regrets making those comments, but noted that he is not interested in the cryptocurrency.
“The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually”, Dimon said. “The bitcoin to me was always what the governments are gonna feel about bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.”
JPMorgan Chase has been actively exploring blockchain and has invested millions of dollars in the technology. In October, the bank in partnership with Royal Bank of Canada and Australia and New Zealand Banking Group launched a new payment processing network that in an effort to accelerate payments and strengthen security.