Cryptocurrencies that are pegged to a stable asset – known as “stablecoins” – should be regulated as strictly as commercial banks and those that are not should be wiped out to prevent instability in the global payments system, according to a report from researchers at the Federal Reserve and Yale University.
The report, titled “Taming the wildcat stablecoins”, was released over the weekend ahead of a meeting of a Treasury Department working group on digital assets on Monday. In it, researchers suggested stablecoins should be issued by insured banks and backed by government bonds.
But anyone can issue a stablecoin and it is these privately produced tokens that have regulators worried.
Tether, for example, is the world’s third-biggest cryptocurrency by market value. It’s designed to be pegged to the US dollar and backed by assets such as dollars and Treasury bills. But regulators in New York recently banned it after an investigation found it had overstated its US dollar backing.
In May, the Federal Reserve’s Lael Brainard raised concerns stablecoins could default and destabilize the financial system.
“Policymakers have a couple of ways to address this development, and they better get going,” the report said.
The report’s authors said the federal government could either “convert stablecoins into the equivalent of public money by (a) bringing stablecoins within the insured bank regulatory perimeter or (b) requiring stablecoins to be backed one-for-one with Treasuries or reserves at the central bank; or (2) introduce a central bank digital currency and tax private money out of existence.”
The US is not the only government that feels the need to cool down the risks that stablecoins present central banks.
“Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system etc,” Fan Yifei, a deputy governor of the People’s Bank of China, told CNBC earlier this month.
The Treasury Department called Monday’s meeting to address some of these issues.
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,” Treasury Secretary Janet Yellen said in a statement Friday. “In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”
Cryptocurrency usage has grown across the world, and most major central banks are now considering issuing their own digital currencies.
The report suggested central bank digital currencies (CBDCs) could be issued either as a deposit account, or as a digital coin, with the latter being the preferred option, as it could operate alongside traditional banking tools like cards. The first option would mean central banks will have to open accounts and administer payments for users.
“The introduction of a central bank digital currency allows the government to maintain monetary sovereignty,” the report said.
Regulators around the world are tightening the screws on cryptocurrencies, but greater oversight and increased transparency is the only way the market can evolve and progress, according to CoinShares investment strategist James Butterfill.
In the wake of a sustained crackdown across various countries on Binance, a crypto exchange and China’s severe restrictions on bitcoin mining, CoinShares’ Butterfill said it was really up to the regulators to offer clearer guidance and better definitions for the market.
“I think bitcoin has got an identity crisis. It’s a birth of a new asset class, and both investors and regulators are struggling to figure out where to place it and how to categorize it,” Butterfill told Insider in an interview this week.
CoinShares is Europe’s biggest crypto asset manager. The company had $3.35 billion under management by the end of the first quarter, according to its most recent earnings report.
He explained how the lack of clear definitions for the asset – such as whether regulators and tax authorities treat it as a currency or a security – means any changes or developments on the regulatory front inject a lot of volatility into the price.
“When new regulation comes along, bitcoin does tend to be volatile, because people don’t know how it’s going to impact the crypto space,” he said.
“As an investor, it’s important to be able to categorize different assets, you know when you’re making investment decisions what you do is you make an economic construct of the world, and you say ‘okay I can see what works in that economic construct’,” Butterfill said.
How to define bitcoin
In the United States, for example, the Internal Revenue Service calls it a taxable property. The Commodities Futures Trading Commission says it’s a commodity and the US Securities and Exchange Commission has no official clarification.
“With something like cryptocurrencies, it’s none of those, it’s its own thing, its ownership of a distributed peer to peer monetary ledger system. And to further extend that, it’s a diversified non-sovereign asset… So, it definitely does warrant its own asset class and all the regulators are slowly discovering this,” Butterfill said.
He said regulators must deal with cryptocurrencies and not ban them because that just drives people to “more nefarious places to buy bitcoin.”
“The only way you can essentially ban it in the end is by cutting off the internet,” he said. “That is a bit like cutting off your foot to spite your toe and economically that has big ramifications so it’s not really practical from that standpoint. So, I think most of them have decided: ‘let’s launch CBDCs’,” he added.
Central banks and the digital world
A number of major economies are exploring digital versions of their own currencies and many have been clear about the risks attached to standard cryptocurrencies, such as bitcoin or ether.
China is running trials of its digital yuan and the Federal Reserve and the Bank of England are looking into the possibility of their own central bank digital currencies (CBDCs), while European Central Bank President Christine Lagarde has said she expects a digital euro to launch in the next four years.
The future of central banks and digital currencies is not all doom and gloom. El Salvador has already made bitcoin a legal tender and the Bahamas has a functioning CBDC.
“We could see people use crypto alongside their own native currencies or we could start to see in the developing world more countries like El Salvador start to adopt bitcoin as a currency instead,” Butterfill said.
Picking which bank to store your money is a big decision. There are many options to choose from nowadays, with each financial institution offering various benefits and services. But when you store your money in a bank, you want to make sure it’s safe.
That’s where the FDIC comes in.
To open an account at a FDIC-insured bank means your money is protected, even in the event of a bank failure. “One of the biggest things is to remember that deposit insurance is paid for by the banks and protects depositors in the unlikely event that their bank fails,” says Julianne Breitbeil, a senior media relations specialist at the FDIC. “It’s not personal insurance for miscellaneous losses.”
Here’s what to know about the FDIC, how it insures your money, and how to get your money back should a bank shut down.
What is the FDIC?
The FDIC is an independently run agency of the US government. Its role is to protect consumers’ deposits in the event a financial institution such as a bank or savings association fails. In doing so, the primary goal of the FDIC is to maintain stability in the economy while boosting public confidence in the US financial system.
While the FDIC operates independently from the federal government, the agency is backed by it. In other words: When you deposit money in a FDIC-insured account, the US government guarantees the money will always be accessible.
Founded in 1933 by Congress, the FDIC was established in response to the staggering number of bank failures during the Great Depression. To date, the FDIC monitors more than 3,500 financial institutions, which is more than half of institutions in America’s banking system.
Although the FDIC is the one insuring your money, the funds actually come from the banks that are FDIC-insured. The FDIC will pay insurance to account holders with deposit accounts up to the insured limit.
What does the FDIC do?
The FDIC doesn’t just insure money – it provides a number of functions to keep banks accountable and consumers’ money safe:
Protects your money: As mentioned, the FDIC offers desposit insurance and protects your money in the event of a bank failure. Sometimes, another bank might act as the “buyer,” and buy the bank that is faltering. If a bank doesn’t step in and buy the failing bank, the FDIC will handle paying the account holder directly.
Regulates financial institutions: It also oversees financial institutions for consumer protection, safety, and soundness. The FDIC also ensures that they’re compliant with consumer protection laws such as the Truth in Savings Act (TISA), the Expedited Funds Availability Act (EFA Act), and the Electronic Fund Transfer Act (EFTA). The FDIC also promotes fair lending statutes and regulations.
Resolves failed banks: The FDIC is also the “receiver” of a failed bank, so it sells the bank’s assets and settles its debts, including claims for deposits in excess of the insured limit.
When you have a deposit account at an FDIC-backed bank – such as a savings, checking, a money market account, or certificate of deposit (CD) – your deposits are backed up to at least $250,000 per bank, per person, per account type. You don’t need to sign up for FDIC insurance. If it’s an FDIC-backed bank, you’re automatically covered up to that amount.
The types of accounts the FDIC insures includes:
Money market accounts
Certificates of deposits (CDs)
What the FDIC doesn’t insure
However, the FDIC doesn’t insure all types of accounts like payment apps, investment accounts, or insurance policies, which includes:
Investments in stocks, bonds, or mutual funds
Life insurance policies
Safe deposit boxes or their contents
Money in apps such as PayPal or Venmo
An exception to PayPal is when you add money to your PayPal account using direct deposit. In this case, that money will be eligible for what’s known as FDIC pass-through insurance.
When you buy cryptocurrency or add money to your Venmo account using remote capture or direct deposit, funds from your Venmo balance also can be backed up by FDIC pass-through insurance.
Although funds in a payment platform such as Venmo or PayPal aren’t typically backed by the FDIC, there might be exceptions, so be sure to comb over the fine print.
How to confirm your bank’s FDIC status
To find out if your financial institution is FDIC-insured, you can either ask a bank representative, look for the FDIC sign at your bank, or you can use the FDIC’s BankFind tool, explains Breitbell.
This tool lets you access specific information about FDIC-backed banks, such as the current operating status, its website, branch locations, and the regulator to reach out to for more information or help.
How to file a claim with the FDIC
In the event of a bank failure, the FDIC will automatically step in and pay insurance to eligible account holders up to the insurance cap. You don’t have to file a claim. This happens automatically, and no action is needed on your part.
Under federal law, the FDIC is required to make these payments as soon as possible. Usually, these payments are made within two business days after a bank shutters, but usually within a business day.
As the bank’s customer, your account gets passed off to an FDIC-insured bank, where you’ll get a new account. The amount in your account will be the same as the insured balance you had at your previous financial institution, which had failed. Otherwise, you’ll receive a check for the balance that was protected.
Note this is only when your financial institution fails. Should you fall victim to identity theft or fraud, that doesn’t fall under what the FDIC protects. It’s a matter that your bank can handle and help with. And if you lost money through an investment account, insurance policy, or payment app, that’s also not something the FDIC handles.
The financial takeaway
The FDIC was created by Congress in 1933 to protect consumers’ money should a bank fail. Should the financial institution where you bank close down, the FDIC will give you back your money.
The FDIC will cover up to $250,000 per person, per account no matter where you do banking. Just make sure to check if your financial institution – and account type – is backed by the FDIC. You can easily check to see if the financial institution you do banking with is FDIC-insured by talking to a bank rep or using the FDIC’s BankFind tool.
Binance plans to double the size of its global compliance team by the end of 2021 as the industry faces “a lot of uncertainty,” CEO Changpeng Zhao said in an open letter on Tuesday.
Zhao said the company’s international compliance team and advisory board has already grown by 500% since last year.
Former Financial Action Task Force executive secretary Rick McDonell, former head of the Canadian delegation to the FATF Josée Nadeau, and former US Ambassador to China Max Baucus are among the high-profile appointments on the team.
“We plan to double our team size by the end of the year, with qualified and experienced advisors to support,” Zhao said in his letter.
Binance has been under fire over a series of regulatory threats. Pressure first began mounting from Ontario, Canada, where a regulator alleged that the company failed to comply with securities laws.
Soon after, UK bank Barclays blocked customers from making card payments to Binance, saying this was done to help keep customers’ money safe.
In an email to users on Tuesday, Binance said it would suspend euro bank deposits from a key European payment network (the Single Euro Payments Area) due to “events beyond our control.” It described the suspension as temporary, according to the Financial Times.
In his letter, CEO Zhao compared crypto adoption to the invention of the car industry to explain that laws and guidelines for road traffic took a while to develop.
“Crypto is similar in the sense that it can be accessible for everyone, but frameworks are required to prevent misuse and bad actors,” he said.
“Binance has grown very quickly and we haven’t always got everything exactly right, but we are learning and improving every day.”
A fresh wave of regulatory clampdowns has set off panic investor behavior and willingness to sell at a loss, bringing cryptocurrency prices down from their peaks earlier this year. Bitcoin was last trading at $34,824 on Wednesday, down around 0.2% on the day. It’s still up 21% so far this year, but has lost 45% since hitting a record in April. Ripple’s XRP fell 1% to 67 cents on Wednesday, while litecoin fell 0.4% to $141.60.
If you invest in crypto, “ask questions and demand clear answers.” That advice, from former SEC Chair Jay Clayton, is now being put to practice as his successor, Gary Gensler, grills the industry over pending approval of a bitcoin ETF.
Yet as the seven-year quest to get the regulatory go-ahead drags on, some fund managers and crypto executives who spoke with Insider question whether Gensler’s SEC has taken too hawkish an approach.
These bitcoin ETF proponents say common concerns about crypto, like volatility and potential market manipulation, could be said of other asset classes, too. They note that Canada, Europe, and Brazil all have functioning bitcoin funds in circulation. And they argue that repeatedly putting off approval carries its own set of risks.
Anxieties that the bitcoin market may be rife with fraud and manipulation are “a bit of a red herring,” said Will Rhind, CEO of GraniteShares, which filed for a bitcoin futures ETF in 2017.
“There are many markets that are open to manipulation, but that doesn’t stop them from existing or people from launching products in them,” he said, pointing to existing ETFs for penny stocks and oil, long swayed by petrostate cartel OPEC.
Ryan Louvar, general counsel at WisdomTree, which manages several European bitcoin ETFs and has applied for one in America, shares the sentiment. The regulatory standard applied to bitcoin funds has been “very, very high – maybe even novel,” he said.
In WisdomTree’s view – one echoed across much of the industry – the SEC’s slow roll on greenlighting a bitcoin ETF is far from risk-free. As the agency delays, demand for bitcoin and other crypto products is not letting up. The result is that the crypto-curious are left with more dubious avenues for investing their money. On balance, such risks to retail investors ought to outweigh the SEC’s manipulation concerns, Louvar said.
It is a view that the SEC is, at a minimum, curious about. In a call for industry comment last month, the commission asked precisely this question: how should the investor protections brought by regulated bitcoin ETFs weigh against fears of manipulation?
Across the Atlantic, that question has been asked and answered, said Jason Guthrie, WisdomTree’s Europe head. Under the EU’s “passporting” regime – which lets financial-services firms seek regulatory approval in 30 European nations simultaneously – crypto ETFs have multiplied across the continent. Sweden was the first domino to fall, starting in 2015, prompting EU-wide approval. The last major holdout is the UK, tied down by messy Brexit negotiations.
But while Europe’s ETF experience may make the SEC look like a laggard, the broader reality is more subtle, said Guthrie. American regulators have moved proactively to regulate crypto-custodial companies such as Coinbase Custody and Fidelity Digital Assets. For evidence, look no further than the fact that many European-listed crypto ETFs, like those of WisdomTree and ETC Group, use custodians based in America.
Regulators across the world are “looking at different things and at different paces,” said Guthrie.
Nor do all fund managers fault the SEC for taking its time. Some think approving a bitcoin ETF opens the floodgates to all manner of newfangled crypto products.
“It’s not just about bitcoin,” noted Greg King, CEO of Osprey Funds, which runs an off-exchange bitcoin fund. SEC staffers “have to be thinking in the back of their head – how is this going to set a precedent for anything else?”
Leah Wald, CEO of Valkyrie, another bitcoin ETF hopeful, added the SEC is being “deliberate” in combing through an industry that has rapidly matured. She said she wished the process was faster but that the concerns were fundamentally “valid.”
SEC approval may ultimately rest on the industry developing surveillance methods that give regulators a handle on when and where markets are being manipulated, said Chen Arad, COO of Solidus Labs, a monitoring firm that works with regulators.
“Once you open the door, it’s harder to go back. The best thing the industry can do is work on providing assurances through data-sharing agreements and shared surveillance,” he said.
Warren Buffett and Charlie Munger blasted Robinhood, slammed the banks that enabled the Archegos Capital meltdown, and reflected on their friendship of six decades in a CNBC interview that aired on Tuesday night.
The Berkshire Hathaway chairman and vice-chairman also shared their key lessons from the pandemic, discussed its impacts on their company, and clashed on the subject of Zoom meetings versus telephone calls.
Here are the 15 best quotes from “Buffett & Munger: A Wealth of Wisdom,” lightly edited and condensed for clarity:
Warren Buffett: “I knew when I met Charlie, after a few minutes in the restaurant, that this guy was gonna be in my life forever. We were gonna have fun together. We were gonna make money together. We were gonna get ideas from each other. We were gonna both behave better than if we didn’t know each other.”
Charlie Munger: “What I like about Warren is the irreverence. We don’t have automatic reverence for the pompous heads of all civilization.”
WB: “It goes well beyond buying a stock and selling it higher. He’s designed dormitories and helped build them. He’s worked at hospitals to understand how they can be made better, serve more people, and do it at less cost. Charlie’s worked on big problems, and he doesn’t need to. And Charlie has never shaded anything he’s told me since we met, in terms of presenting it to me in a different way than reality. He’s never done anything I’ve seen that’s self-serving. He makes me better than I would otherwise be. I don’t wanna disappoint him.” – describing what he admires about Munger.
WB: “I never heard my dad say to me in my life, ‘Be sure you pay all your debts.’ But I just watched how he lived, and you wanna have certain people in life that you don’t want to disappoint. You wanna have people that make you a better person than you otherwise would be. Charlie does that for me now, but my dad did it for me early on.”
WB: “What really is great is if you can do what you want to do in life, and associate with the people you want to associate with in life. We’ve had that luxury now for 60 years or close to it. That beats 25-room houses and six cars.”
CM: “If it’s clear that something is a mistake, fix it quickly. It doesn’t get better while you wait.”
CM: “Think of how massively stupid that was. It was the lure of the really easy money that the idiot was paying you, being the prime broker for the jerk. They were all foolish. But Credit Suisse has managed to be the biggest fool of all.” – commenting on the Archegos fiasco earlier this year.
CM: “Robinhood is beneath contempt. It’s a gambling parlor masquerading as a respectable business. It’s basically a sleazy, disreputable operation.” – on the popular trading platform.
CM: “The regulators need to change laws now. But if you’re running a gambling parlor, you want the big players to gamble more furiously. We don’t wanna suck people into gambling for way more than they can afford.” – criticizing lax rules in the securities business.
CM: “Our wonderful, free-enterprise economy is letting all these crazy people go to this gross excess. The communist Chinese are avoiding it. They step in preemptively to stop speculation. I don’t want all of the Chinese system, but I certainly would like to have the financial part of it in my own country.”
WB: “If you get enough people believing something won’t be there next week in banking, it won’t be there next week, absent the Federal Reserve.” – recalling companies’ mad rush to tap their credit lines when the pandemic struck.
WB: “The biggest thing you learn is that the pandemic was bound to occur, and this isn’t the worst one that’s imaginable at all. Society has a terrible time preparing for things that are remote but are possible, and will occur sooner or later.”
WB: “The economic impact has been extremely uneven. Millions of small businesses have been hurt in a terrible way, but most of the big companies have overwhelmingly done fine, unless they happen to be in cruise lines or hotels or something.” – Buffett added that the pandemic surprised his team in many ways, and cautioned there’s a lot they still don’t know about the fallout.
WB: “I don’t see any plus to it particularly. I’d rather have my feet on the desk, and I find the telephone a very satisfactory instrument.” – responding to Munger saying he’s “fallen in love with Zoom” and uses it three times a day.
WB: “I wouldn’t have wanted to work there. I’d resign or be fired. I’d rather be in a jail cell with a few people who are interesting, and plenty of reading material.” – commenting on how he would react to a centralized management system at Berkshire.
Khan has a rare background for someone assuming such an influential role in US government: an extensive knowledge of tech companies and how complex antitrust laws could apply to them. Some pro-Big Tech players already appear concerned, Vox reported, as the industry has long operated without strict regulation.
Khan attended Yale Law School and has been critical of Amazon
She told the BBC in January that she realized “markets had come to be controlled by a very small number of companies” and said that trend was “systemic” in the US. Khan was particularly inspired by a trip to the grocery store in 2013 when she realized the candy selection was largely owned by just two or three confectioners.
“I think there is a very coherent story to be told about how market power is harming us as a whole in all these bizarre ways that are not readily apparent,” she told Time in 2019.
She later decided to study law at Yale Law School. In 2017, during her time as a student there, Khan published a paper called “Amazon’s Antitrust Paradox,” drawing attention to the current “unequipped” and unnuanced antitrust framework. She wrote that it enabled the tech giant to evade antitrust scrutiny.
She specifically said Amazon has focused on growing rapidly and using predatory pricing, which has helped it evade government scrutiny since the consumer stays unharmed.
Current US antitrust law stipulates that companies should be scrutinized when their bloated market power directly harms consumers, like if prices increase for them. But Khan instead says there are other, less obvious negative side effects that result from a small number of monopolies holding so much dominance – even if the consumer goes unharmed – like firms harnessing their market power to squeeze out smaller competitors.
The paper was widely publicized and cemented Khan as “Amazon’s antitrust antagonist,” as The New York Times wrote in late 2018. Then-Republican Sen. Orrin Hatch criticized Khan’s paper and dubbed her the leader of the “hipster antitrust” movement.
She’s become a vocal critic at large of big players in the tech world and has advocated for stronger anticompetitive regulation, an issue that has bipartisan support.
Lawmakers on both sides of the aisle, like Sen. Elizabeth Warren and Republican Sen. Josh Hawley, have supported her ideology, and Sen. John Thune of South Dakota was one of the 21 Republicans that backed her FTC confirmation, NBC reported.
She’s already been helping the US crackdown on Big Tech
Khan was counsel to the House Judiciary Committee’s subcommittee on antitrust, commercial, and administrative law while the group was investigating Google, Apple, Facebook, and Amazon over their role in online market competition. Khan sat behind lawmakers as they questioned the CEOs of the Big Four in a high-profile late July 2020 hearing.
The Securities and Exchange Commission is looking at changing rules around share trading after the day-trader frenzy around meme stocks showed equity markets may not be as efficient as they could.
Chairman Gary Gensler said Wednesday he has asked the regulator’s staff to submit recommendations on a range of market rules, including the high fees paid to Wall Street brokers for executing small-investor orders and the rise of commission-free brokerage apps.
Their recommendations will address the issue of payment for order flow, or the compensation online brokers receive when stock orders are routed to third-party firms like Virtu Financial and Citadel Securities in order to carry out the trade.
Shares in Virtu fell 7.7% after Gensler’s comments. The high-speed trader handles about one-third of individual investors’ order flow in US stocks, according to the Wall Street Journal. Virtu’s stock rallied this year alongside the meme-stock frenzy, while Citadel Securities isn’t publicly traded.
Gensler previously called out popular investing apps like Robinhood that have introduced millions of amateur investors to stocks through the lure of zero commissions. He criticized the company for encouraging the gamification of the stock market, and for not doing enough to educate its user base of the risks associated with investing.
Robinhood’s business model, which operates on a system of payment for order flow, allows it to offer so-called “commission-free trading.” But some lawmakers have called for increased examination into the potential conflict of interest it presents its users.
The SEC will look into this practice, that uses phone alerts and other notifications to get investors to trade more, Gensler said at a Piper Sandler conference in New York.
“The question is whether our equity markets are as efficient as they could be, in light of the technological changes and recent developments,” he said.
Most of these issues came to regulatory attention after day traders used social platforms like Reddit to bid up prices of heavily-shorted stocks like GameStop, fuelling an over 1,200% surge in the video-game retailer’s stock in January.
New SEC rules could impact the business models that online brokerages use, meaning Robinhood and its competitors would have to operate under new guidelines.
“Brokers profit when investors trade,” Gensler said. “For those brokers who have these arrangements – and not all do – higher trading volume generates more payment-for-order flow. What makes the current zero-commission brokerage environment different is that investors do not see their costs as they’re executing trades, so they may perceive them as free.”
Potential fines are the latest development in a years-long dialogue between the bank and the regulator. In 2018, the Fed classified Deutsche Bank’s US operations as being in “troubled condition,” one of the lowest classifications. In May 2020, it sent a letter to the bank saying that it had failed to improve past its “troubled” status.
Deutsche Bank passed the Fed’s stress test for the first time in 2019, but its CEO Christian Sewing has recognized the bank’s continued shortcomings.
“Are we there yet regarding our controls? The answer is no,” Sewing said in prepared remarks at the bank’s annual general meeting in 2020.
New York’s Department of Financial Services fined Deutsche Bank $150 million last July in part due to its dealings with convicted sex offender and financier Jeffery Epstein. The DFS said that Deutsche Bank processed payments that should have been flagged through its compliance systems, including payments to people who were publicly alleged to have been connected to Epstein.
Jamie Dimon blasted cryptocurrencies as inferior to traditional assets, warned people against buying them, and urged regulators to scrutinize them more closely at a congressional hearing this week.
“Something that’s not supported by anything, I do not believe has much value,” the JPMorgan CEO said. Blockchain and stablecoins aren’t in that camp, and his opinion doesn’t dictate whether his company embraces crypto, he added.
“My own personal advice to people is stay away from it,” Dimon said. “That does not mean the clients don’t want it – this goes back to how you have to run a business. I don’t smoke marijuana, but if you make it nationally legal, I’m not gonna stop our people from banking it.”
JPMorgan is exploring ways to allow clients to buy and sell crypto and have it appear on their statements, the bank’s chief said. However, he reiterated his view that crypto pales in comparison to conventional assets, and carries a lot more risk.
“It’s nothing like a fiat currency, it’s nothing like gold,” Dimon said. “Buyer beware.”
The executive also bemoaned the lack of rules in the crypto space, which he described as a “serious emerging issue” in his latest shareholder letter.
“The regulators who are a day late and a dollar short should be paying a lot more attention,” he said, highlighting crypto, payment for order flow, and high-frequency trading as areas of concern.
Bitcoin surged in price from under $10,000 a year ago to north of $60,000 in April, and continues to trade at north of $30,000. Dimon said he wasn’t a fan of the coin earlier this month, and has dismissed it as fraudulent and dangerous in the past.
“It’s worse than tulip bulbs,” he said in 2017. “It won’t end well. Someone is going to get killed.”