Recently, JPMorgan Chase CEO Jamie Dimon, the largest bank in the United States, will allow customers to buy Bitcoin. However, the company will not hold cryptocurrencies for customers.
Jamie Dimon emphasized that he still “dislikes” Bitcoin.
It is true that banks dislike Bitcoin. From what I know, there are several main reasons why banks do not support or dislike Bitcoin and other cryptocurrencies:
1. Loss of control: Bitcoin operates on a decentralized network, without the control of any intermediary organization, while traditional banks often operate based on an intermediary model. This can reduce the role of banks in the financial system.
2. Safety and security: Although blockchain technology is very secure, cryptocurrency exchanges are still frequently attacked and scammed. Banks are concerned that the lack of consumer protection will undermine trust in the financial system.
3. Legal and compliance risks: Banks must comply with many legal regulations and anti-money laundering (AML) rules, while cryptocurrencies are often not tightly regulated. This can create risks for banks if they engage in cryptocurrency transactions.
4. Price volatility: The prices of Bitcoin and other cryptocurrencies are very volatile, which can lead to high risks for investors and financial institutions. Banks usually prefer stability in financial products.
5. Competition: Bitcoin and cryptocurrencies can be seen as direct competition to the traditional financial products that banks offer, from savings accounts to money transfers.
Despite these reasons, some banks and financial institutions have begun looking for ways to integrate cryptocurrencies into their services to meet customer demand.
