The blockchain technology will possibly transform financial institutions and banks such as JP Morgan Chase. The CEO Jamie Dillon already called Bitcoin a fraud, but he is now considering the technology underlying cryptocurrencies a threat to his assets.
In their annual report that was released Tuesday, the bank presented cryptocurrencies such as Bitcoin and Ethereum as “risks factors” for its business. They believe that the bank might not be able to compete with the fast evolving blockchain technology.
The bank wrote in their report,
“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 evolution of the blockchain technology forced them to adapt and modify their products to retain their customers but they think they might not be able to resist the pressure on prices and fees they are facing.
According to the annual report,
“Ongoing or increased competition may put downward pressure on prices and fees for JPMorgan Chase’s products and services or may cause JPMorgan Chase to lose market share,”
Last week, in its annual report, the Bank of America arrived to the same conclusion that cryptocurrencies and blockchains are becoming a serious threat for the banking industry and that it might not be able to survive on the long run.
The bank didn’t want to speak about why it is now considering cryptocurrencies a risk factor, but also seemed enthusiastic about using the blockchain technology to resist to the competition. Umar Farooq, JPMorgan Chase’s head of blockchain initiatives, mentioned earlier this month on a positive tone,
“It’s more than thriving. People have been surprised how quickly it basically spread as a way to address and think about customers differently… It’s quite insane.”
The bank’s analyst finished with this optimistic statement;
“Opportunities for banks to utilize blockchain technologies for conducting business could have far-reaching implications for the sector in our view.”
The fast evolving blockchain technology can disrupt many industries such as the banking system, and large financial institutions are now considering crypcurrencies a menace for their future.