Dimon denounces bitcoin as “terrible”..predicts its downfall

4.si

http://rt.com/usa/chase-ceo-bitcoin-terrible-downfall-100/

The head of the largest bank in the US said Thursday that bitcoin is a “terrible store of value,” in part because international governments, bankers, and other officials are unsure whether they can trust the digital currency.

Jamie Dimon, the CEO of JP Morgan Chase – which has $2.509 trillion in total assets – told CNBC that the cryptocurrency does not have much staying power because the hurdles it faces are insurmountable.

It’s a terrible store of value. It could be replicated over and over,” he said. “It doesn’t have the standing of a government.”

Bitcoin proponents say that the currency’s ability to exist without any centralization is what makes it so appealing. It is a peer-to-peer payment system that is formulated when computers compete with each other to “mine,” or solve cryptographic problems, and are assigned bitcoins as a reward.

The use of bitcoin became so prevalent in 2013 that its value surged from $13 to over $1,000 by the end of the year, when it was the subject of Senate hearings that were largely neutral and at times positive towards the digital currency.

Dimon went on to cite media coverage that reported on the use of bitcoin for nefarious purposes – drugs and the solicitation of murder among them.

And honestly, a lot of it – what I’ve read from you guys – a lot of it is being used for illicit purposes. And people who will get upset with it is governments,” Dimon said. “Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously it’s almost impossible to do with something like that.”

Despite any flaws bitcoin may have, the digital currency has proven to be an especially popular system worth investigating, and has spawned a growing list of parallel online currencies, including Litecoin, Dogecoin, and Coinye. Chase seems to agree, as the bank filed a patent application back in 2000 claiming a “computer-implemented method of providing an anonymous payment.”

———–

“It doesn’t have the standing of a government.”

no shit..why is bitcoin any different than your derivatives or CDS..they are based on nothing as well..its just pixels..

401

~ by seeker401 on January 27, 2014.

18 Responses to “Dimon denounces bitcoin as “terrible”..predicts its downfall”

  1. Responses to Post-Hearing Questions for the Record Submitted to Patrick Murck
    From Senator Thomas R. Carper
    “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” November 18, 2013

    1. Overall, how would you assess the federal government’s activities thus far regarding virtual currencies and in what areas do you believe more work needs to be done?
    The U.S. federal government’s work on Bitcoin has been notably thoughtful and careful. As you have pointed out, the Treasury Department, the Internal Revenue Service, the Justice Department, the Department of Homeland Security, and the Consumer Financial Protection Bureau have looked into Bitcoin, educated themselves about it, and found little that is troubling. There will be areas where Bitcoin’s unique characteristics challenge the application of existing law, but in most areas the laws already on the books are sufficient to protect the public. We will continue to assist federal, state, and international governments seeking to understand Bitcoin, apply existing law to its use, and resolve any issues that arise. We believe the jurisdictions that foster Bitcoin innovation and use will be rewarded with jobs and economic growth.

    https://bitcoinfoundation.org/blog/wp-content/uploads/2014/01/Murck-QsFR.pdf

    DOJ Finally Going After The Criminal Materminds With Arrest Of 24 Year-Old Bitcoin Exchange Founder

    http://www.zerohedge.com/news/2014-01-27/doj-finally-going-after-criminal-materminds-arrest-24-year-old-bitcoin-exchange-foun

  2. Jamie … You’re a whore, you know we think you are scum … if you think Bitchcoin is not good, we will chase it.

    • yeah, reverse psychology..

      • Bitcoin: Revolutionary Game-Changer Or Trojan Horse?

        http://www.zerohedge.com/contributed/2014-02-05/bitcoin-revolutionary-game-changer-or-trojan-horse

      • great link..

        “Reuters notes:

        Already, 21,000 merchants are using Coinbase to accept Bitcoin from customers.
        Indeed, there are websites listing scores of businesses which now accept bitcoin.

        (And you can use Bitcoin at Amazon, Barnes and Noble, Crate & Barrel, Target, Sears, CVS, Hyatt Hotels, Kohl’s, Burger King, Applebees, Victoria’s Secret, Land’s End, Facebook, Groupon, Banana Republic, the Gap, AMC and Fandango movie theaters, Whole Foods, Wine.com, Wine Enthusiast, Papa John’s, Nike, Adidas, Sephora, Sports Authority, Staples, Zales jewelry, Game Stop, FTD flowers, Zappos and hundreds of other stores if you use Bitcoin to buy gift cards at Gyft.)

        But is Bitcoin going mainstream a good thing or a bad thing?

        People Power … Challenging the Status Quo?

        Andy Haldane – Executive Director for Financial Stability at the Bank of England – believes that peer-to-peer internet technology will lead to the break up of the big banks.

        Bank of America said “We believe Bitcoin could become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers”

        Visa has attacked Bitcoin as being less trustworthy than its well-established payment system.

        So it sounds like Bitcoin is shaking up the status quo …

        Backed by … the Big Banks?

        On the other hand, a lot of major mainstream players are backing Bitcoin and other digital payment systems.

        Wells Fargo wants to get into Bitcoin in a big way.

        JP Morgan Chase has filed a patent for a Bitcoin-like payment system. And Russia’s largest bank is working on a Bitcoin alternative as well.

        Ben Bernanke and the Department of Justice have both cautiously blessed Bitcoin.

        François R. Velde, senior economist at the Federal Reserve in Bank of Chicago, labeled it as “an elegant solution to the problem of creating a digital currency.” John Browne theorizes:

        While crypto-currencies remain insulated from central bank manipulation, governments have thus far been tolerant, perhaps because their capability to track transactions is more advanced than Bitcoin believers admit.
        Indeed, Bitcoin is not really that anonymous, as the NSA can track Bitcoin trades.

        The NSA can apparently also hack Bitcoin. And see this. Given that the NSA may be changing the amount in people’s accounts, it would be child’s play for them to change the amount in your Bitcoin wallet.”

  3. Ben Bernanke’s letter to Congress: Bitcoin and other virtual currencies “may hold long-term promise”

    Dear Senators:
    +
    Thank you for your recent inquiry regarding virtual currencies. As you noted, virtual currencies have been receiving increased attention from U.S. authorities over the past several months.
    +
    Historically, virtual currencies have been viewed as a form of “electronic money” or area of payment system technology that has been evolving over the past 20 years. Over time, these types of innovations have received attention from Congress as well as U.S. regulators. For example, in 1995, the U.S. House of Representatives held hearings on “the future of money” at which early versions of virtual currencies and other innovations were discussed. Vice Chairman Alan Blinder’s testimony at that time made the key point that while these types of innovations may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.
    +
    Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market. In general, the Federal Reserve would only have authority to regulate a virtual currency product if it is issued by, or cleared or settled through, a banking organization that we supervise. Given the Federal Reserve”s authority and the manner in which virtual currencies have developed, the Federal Reserve has focused primarily on a supervised banking organization’s role in the products’ sale and distribution, as well as the applicable regulations, such as Bank Secrecy Act (BSA) /anti-money laundering (AML) requirements.

    Policies, Procedures, Guidance or Advisories
    +
    In March 2013, the Financial Crimes Enforcement Network issued guidance to clarify that an administrator or exchanger of virtual currency is generally considered a money transmitter under definitions and therefore subject to BSA requirements?’ The Federal Reserve’s supervisory expectations and guidance related to compliance for bank transactions using virtual currencies have been incorporated into the Electronic Cash section of the Federal Financial Institutions Examination Council (FFIEC) Examination Manual. The overall objective of the guidance and examination procedures provided in this section is to assess the adequacy of a bank’s systems to manage the risks associated with electronic cash and management’s ability to implement effective monitoring and reporting systems. The section further lists applicable risk factors and risk mitigation steps for banks to consider. The Federal Reserve supervision staff has on–going initiatives with the FFIEC member agencies to identify additional areas of concern that require heightened attention by the banking organizations we supervise.
    +

    Ongoing Coordination
    +
    In May 2013, the US. Department of the Treasury (Treasury) named Liberty Reserve S.A. as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act (Section 31l).4 ‘According to the announcement, Liberty Reserve, a web–based money transfer system or “virtual currency,” was specifically designed and frequently used to facilitate money laundering in cyber space. This action also marked the first use of Section 311 authorities against a virtual currency provider.
    +
    The statutory language of Section 311 requires Treasury to consult with the Federal Reserve Board when these special measures are being developed and proposed. Therefore, Federal Reserve Board staff participated in coordination and consultation efforts leading up to the designation of the virtual currency provider, Liberty Reserve, under Section 311.
    +
    Specific Plans or Strategies
    +
    As noted above, the Federal Reserve plans to work with other FFIEC member agencies on electronic cash and related issues such as virtual currencies, as needed, for banking organizations. The Federal Reserve will continue to monitor developments as part of its broad interest in the safety and efficiency of the payment system. We also stand ready to cooperate with other agencies in fulfilling their mandates, as appropriate.
    +
    I hope you find this information helpful.
    +
    Sincerely,
    [Ben Bernanke]

    Liberty Reserve

    http://en.wikipedia.org/wiki/Liberty_Reserve

    • from wiki:

      “Liberty Reserve was a Costa Rica-based centralized digital currency service that billed itself as the “oldest, safest and most popular payment processor … serving millions all around a world”. The site had over one million users when it was shut down by the United States government. Prosecutors argued that due to lax security, alleged criminal activity largely went undetected, which ultimately led to them seizing the service.
      In May 2013, Liberty Reserve was shut down by United States federal prosecutors under the Patriot Act after an investigation by authorities across 17 countries. The United States charged founder Arthur Budovsky and six others with money laundering and operating an unlicensed financial transaction company. Liberty Reserve is alleged to have been used to launder more than $6 billion in criminal proceeds during its history.”

      it can happen again..and probably will when its to big..

  4. Man Jumps To His Death From JPMorgan London Headquarters

    http://www.zerohedge.com/news/2014-01-28/man-jumps-his-death-jpmorgan-london-headquarters

  5. Electric Money will Eliminate Bank Runs

    QUESTION: Mr. Armstrong; Thank you so much for what you do. My son actually introduced you to me. He works in New York at a major bank and says everyone reads you because you actually have experience. He said there is talk about electronic money, but was not entirely sure why the banks are behind that development. Can you shed some light on that subject of electronic money?

    Thank you so much

    GU

    ANSWER: Most banks have now used the money laundering pretense to limit cash withdrawals. They will ask all sorts of questions if you even TRY to withdraw your money. They realize we are on the verge of a crisis in banking on a global scale (less so in the USA). The worst banks are in Europe and that includes those in Germany and even Britain such as HSBC. Eliminate CASH and you eliminate BANK RUNS.

    This is the reason Behind the Curtain they are pushing this and it was Larry Summers, their boy, who flew that balloon I believe at the instigation of the banks. He was behind getting rid of Glass Steagall also for the banks and this is why he had to decline being appointed as Fed Chairman. Can you imagine any interrogation of who pulls Larry’s strings would expose far too much of what is going on behind the scenes.

    http://armstrongeconomics.com/2014/01/25/electric-money-will-eliminate-bank-runs/

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