JPMorgan’s CEO Jamie Dimon acknowledged the threat posed by Bitcoin and other emerging payment technologies in his annual letter to shareholders.
He indicated that such technologies can pose a threat to the traditional banking model. He said:
“You all have read about bitcoin, merchants building their own networks, PayPal and PayPal look-alikes. Payments are a critical business for us – and we are quite good at it. But there is much for us to learn in terms of real-time systems, better encryption techniques and a reduction of costs and ‘pain points’ for customers.”
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He went on to reassure shareholders that the bank is examining its competitors in “excruciating detail”, “so we can learn what they are doing and develop our own strategies accordingly.”
His statements were introduced by saying, “Silicon Valley is coming”. “There are hundreds of start-ups with a lot of brains and money working on various alternatives to traditional banking,” he continued. Aside from payments, numerous startups are bringing innovation to stock trading, lending and other financial services.
Dimon previously commented that bitcoin as a currency is “a terrible store of value”. On the potential threat, he said in 2013 that “Bitcoin developers are going to try and eat our lunch and that’s fine,” adding that “that’s called competition and we will be competing.”
Several notable executives from the bank have since joined Bitcoin startups.