The digital currency community is showing excitement towards a “competitor” that JPMorgan Chase identified in their newly published annual report. Submitted to the U.S. Securities and Exchange Commission on February 27th, 2018, the report indicates that the bank views digital currencies as a potential competitor to their financial services. Listed under the annual report’s section detailing its competitors, JPMorgan Chase is clear in identifying digital currencies as a potential threat to their business, in at least some form. “New competitors have emerged,” the bank stated, on page 25 of the report. “Technological advances and the growth of e-commerce have made it possible for non-depository institutions to offer products and services that traditionally were banking products.”
The bank further stated that these technological advances allow both financial institutions and “other companies” to provide electronic, internet-based financial solutions. “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,” the bank added.As a result of their competition, JPMorgan Chase used the report as an opportunity to inform the SEC that new technologies could require the bank to spend more money to allow its products to stay competitive. It stated that the bank needs to match services offered by competitors, “including technology companies.” The news follows an earlier report in 2018 that the largest credit card issuers in the U.S. banned digital currency spending.Notably, JPMorgan Chase’s CEO, Jamie Dimon, made controversial statements towards digital currencies in 2015, calling them a waste of time that governments were not likely to tolerate. However, in 2017 Dimon stated that he regretted getting involved in a discussion that he was not personally interested in.
While many are skeptical of the impact of these statements and theorize that banks are merely trying to protect themselves, their statements mark a significant trend. Digital currencies went from being previously dismissed, to being named as a threat to the usual business of financial institutions.Bank of America also mentioned digital currencies in their annual report last week. The bank stated that the “widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems,” could require spending to overcome. Further, in Louisiana-based IberiaBank’s annual report, filed last week, it mentioned that “Fintech developments, such as bitcoin, have the potential to disrupt the financial industry and change the way banks do business.”Image credit: picserver.org
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