Despite becoming a designated participant in Bitcoin ETF, JP Morgan CEO emphasizes skepticism towards Bitcoin

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Opinion that “Bitcoin does nothing”

On the 17th, Jamie Dimon, CEO of US financial giant JP Morgan, once again expressed his skepticism towards the crypto asset (virtual currency) Bitcoin (BTC). This was reported by CNBC in the US.

Mr. Dimon evaluates blockchain itself as a useful technology. He further pointed out that cryptocurrencies equipped with smart contracts can be used to buy and sell real estate, transfer data, and tokenize assets, for example.

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Ethereum (ETH) is a typical virtual currency equipped with smart contracts.

What is a smart contract?

A system that automatically executes a contract according to pre-programmed conditions. When concluding a contract, administrative work such as intermediaries and contract drafting is often required, so making it possible to automatically execute contracts can be expected to improve efficiency and reduce costs. .

Virtual currency glossary

“Bitcoin doesn’t do anything,” Dimon said. This suggests that there is no functionality similar to smart contracts. He opined that even if there were uses for Bitcoin, it was being used for fraud, tax evasion, and human trafficking, and that he personally recommended not getting involved.

“I have always strongly opposed cryptocurrencies such as Bitcoin,” Dimon said at a U.S. Congressional hearing in December last year. The reason cited is that it is used for crimes such as money laundering.

JP Morgan is active in the blockchain business and offers the digital currency “JPM Coin.” Additionally, in November last year, the company announced that it would utilize Avalanche (AVAX) technology in a proof of concept for real-world asset (RWA) tokenization.

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BlackRock CEO turns positive

In contrast to Dimon, Larry Fink, CEO of BlackRock, has changed his opinion on Bitcoin. Although it was criticized in the past, it is now being evaluated as an asset that serves as an inflation hedge.

BlackRock has just begun offering a Bitcoin spot ETF after receiving approval from the U.S. Securities and Exchange Commission (SEC).

Meanwhile, despite Dimon’s criticism, JPMorgan’s business includes providing liquidity as an Authorized Participant (AP) for a Bitcoin ETF provided by BlackRock.

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Bitcoin version NFT or Layer 2

Regarding Bitcoin, efforts are underway to add various functions such as layer 2.

For example, Bitfinity, a project that can deploy smart contracts written in Solidity (Ethereum’s programming language) for Ordinals and BRC-20, has raised a total of $7 million (1 billion yen).

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Ordinals is a protocol introduced in January 2023, and is a system that assigns numbers to Satoshi, the smallest unit of Bitcoin, associates them with specific information such as images and text, and tracks them. It is also called the Bitcoin version of NFT (non-fungible token).

BRC-20 is an experimental token standard for Bitcoin, created using a framework similar to Ordinals, which allows Satoshi to be imprinted with specific data. Please note that BRC-20 itself does not have a smart contract.

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