JPMorgan Chase (JPM), the world’s biggest commercial bank, plans to get involved with stablecoins, says
CEO Jamie Dimon.
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Dimon, who has long been a vocal critic of cryptocurrencies, says he doesn’t get the appeal of stablecoins himself, but adds that the bank he runs can’t afford to stay on the sidelines. “We’re going to be involved in both JPMorgan deposit coin and stablecoins to understand it, to be good at it,” said Dimon. “I think they’re real, but I don’t know why you’d want to (use a) stablecoin as opposed to just payment.”
Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar or price of gold. In June of this year, JPMorgan announced that it will launch a more limited version of a stablecoin that only works for the bank’s clients. Dimon made the comments about entering the stablecoin market during JPMorgan’s latest earnings conference call with analysts and media.
Fintech Threat
Dimon, age 69, has long been one of the most vocal opponents on Wall Street of cryptocurrencies such as Bitcoin (BTC). However, Dimon acknowledged that the regulatory framework around cryptocurrencies and stablecoins is opening up, and that JPMorgan Chase faces growing threats in the digital asset space from financial technology companies (fintech).
“You know, these guys are very smart,” Dimon said of his fintech competitors. “They’re trying to figure out a way to create bank accounts, to get into payment systems and rewards programs, and we have to be cognizant of that. And the way to be cognizant is to be involved.”
Advocates say that stablecoins could offer a potentially faster and cheaper form of payment over traditional banking systems such as ACH and SWIFT, which are older systems that take days to settle. JPM stock has gained 21% this year.
Is JPM Stock a Buy?
The stock of JPMorgan Chase has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on 12 Buy, four Hold, and two Sell recommendations issued in the last three months. The average JPM price target of $301.19 implies 5% upside from current levels.
