The financial industry’s most important players have come out in support of bitcoin, saying that they see the digital currency as a disruptive innovation that will help keep the financial system safer and more efficient.
In an interview with Bloomberg News, chief financial officer of JPMorgan Chase & Co. Jamie Dimon said that he sees bitcoin as a “game-changer” for financial markets.
He also argued that the currency will be able to solve the biggest problems that regulators have faced with the financial industry.
“Bitcoin is not going to be a big problem for us,” Dimon told Bloomberg.
“The big issue we have to face is we have no idea how big it is, or how fast it is going to go up in price.”
In addition to Dimon, several other major financial institutions have also voiced support for bitcoin, including Goldman Sachs Group Inc., JPMorgan Chase, Citigroup Inc., Bank of America Corp., UBS AG, and Deutsche Bank AG.
As bitcoin’s price surges, regulators have also been forced to tighten their grip on the technology.
In December, the U.S. Securities and Exchange Commission fined Bank of North America $2.5 billion for allegedly failing to adequately monitor bitcoin trading.
The Financial Industry Regulatory Authority (FINRA) said last month that it was considering taking action against Coinbase, the company that launched the cryptocurrency and allowed its users to trade in the currency.
The regulator also recently ordered the company to remove a virtual currency that was used to raise money for the American Civil Liberties Union’s digital rights campaign, which is funded by digital currency supporters.
Earlier this month, the Federal Trade Commission also fined Coinbase and other digital currency providers $2 billion for violating the anti-money laundering rules.
Meanwhile, regulators in the European Union have been looking into whether bitcoin is a “financial instrument,” similar to the virtual currency of the same name that is used in the region.
Bitcoin is the first digital currency to gain widespread currency acceptance, thanks to its ease of use, speed of transactions, and low fees, which have attracted millions of users worldwide.
In addition, the currency has raised more than $30 billion in venture capital backing, which means it has the potential to be the next big thing for the financial services industry.
The move to embrace bitcoin comes amid concerns that it could be used as a tool to launder money, which could also be a problem for regulators.
If regulators decide to crack down on the currency, it could create new headaches for financial institutions and their customers, said Mark Thiessen, senior vice president and head of global policy at the Center for Internet and Society at the libertarian Cato Institute.
“They could be fined for accepting a currency that is not legal tender, which would make it more difficult for banks to make money from it,” he said.
While it’s unclear how much regulators will be fined, the industry is bracing for the fallout, with some financial institutions arguing that bitcoin is more vulnerable to fraud than traditional currencies.
Some financial firms are already warning customers that they will no longer be able buy bitcoin in the United States, citing the potential for fraud.
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