Global financial services company JPMorgan Chase has become the latest bank to label the rise of cryptocurrencies as a threat to its business.
In its annual 10-K filing with the U.S. Securities and Exchange Commission, the bank noted the potential impact that cryptocurrencies could have on payment processing under its “risk factors” section, saying the institution could be disrupted by the still nascent technology.
The bank wrote:
“Furthermore, both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation. New technologies have required and could require JPMorgan Chase to spend more to modify or adapt its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies.”
The comment echoes those made in the Bank of America (BoA) and Goldman Sachs annual filings. Both financial giants also included cryptocurrencies under their risk factors sections, though for various reasons.
Like JPMorgan Chase, BoA noted that clients could choose to use digital currencies instead of traditional banking services and crypto competition could force it to adopt new technologies.
Goldman Sachs took a similar tack, saying in its filing that the company could become “exposed to risks related to distributed ledger technology” due to how clients are turning to new financial products.
However, BoA also included concerns about following anti-money laundering and know-your-customer regulations, given the lack of regulatory oversight on cryptocurrencies.
This is the first time JPMorgan has included cryptocurrencies in its annual filing – the term did not appear in prior years. The declaration is notable both because of its timing, and because not so long ago, the bank’s chief executive Jamie Dimon called bitcoin a “fraud,” saying that cryptocurrency markets were in a bubble that would eventually collapse.
While he later said he regretted the comments, he has not retracted his view of a possible impending collapse.
JPMorgan Chase image via Shutterstock