JPMorgan Chase’s global head of payments Takis Georgakopoulos argues that cryptocurrency has “a niche use case” and said demand for cryptocurrencies as a means of payment has experienced a drastic decline in the last six months.
Georgakopoulos, speaking in an interview with Bloomberg Television on Tuesday, said that while the bank still accepts clients who want to use cryptocurrencies as a payment methodthey no longer take any major risk as the coins lose popularity.
“When it comes to cryptocurrencies as a payment method, we say our customers are in high demand, let’s say up to six months ago. We see very little at the moment,” concluded Georgakopoulos.
Keep betting on the sector
JPMorgan was one of the first banks to enter the cryptocurrency space, and despite its recent decline in popularity and price, the bank continues to bet heavily on the tokenized asset sector. While hitting the recent popularity of cryptocurrencies, Georgakopoulos took the opportunity to recite the many benefits of digital currencies.
“Blockchain technology has absolutely one big advantage: the fact that people can exchange information without a centralized exchange, [and] when it comes to security, privacy, etc. Georgakopoulos said. JPMorgan also sees the gaming space as another growth area, where the “intersection of real, virtual, and crypto” in both traditional gaming and the metaverse is getting bigger.
But with a recent slump in cryptocurrency prices showing little sign of ending, it is unclear when cryptocurrency’s popularity will return. Cryptocurrencies have seen the steepest drop in the market on record this year and have lost more than $2 trillion from their market value in less than a year. High-profile digital asset companies like Terraform labs and Three Arrow Capital have been pushed into bankruptcy and the king of cryptocurrencies, Bitcoin, whose price was above $65,000 in November 2021, now remains below $20,000.
What about other alternative payments?
When asked about other digital tokens like central bank digital currencies (CBDCs), Georgakopoulos was tired of making predictions as little is known about how countries’ digital currencies would work.
“We haven’t seen them yet and the rules for how they will develop have not been written with the possible exception of China,” Georgakopoulos said, referring to China’s digital yuan that has been on trial since 2020 and one of the most advanced. important economy, but faces scrutiny and criticism abroad for a possible follow-up.
Georgakopoulos says that JPMorgan believes that blockchain and digital currencies used as alternative payment options have some inherent advantages, but also face some significant obstacles.
“The most exciting thing about a digital currency on a blockchain is the ability to move information and value at the same time, in real time, without any of the limitations of traditional payment systems,” says Georgakopoulos, which is why JPMorgan is investing in its own blockchain network that can take fiat currencies as well as digital currencies or central bank digital currencies as they evolve in the future.
JPMorgan also backed London-based digital asset startup Ownera last week with a $20 million Series A funding. He argues that in areas like the Internet of Things, smart devices, and mobility, new digital payments may be needed in the future, but for now, the world is still a long way off.
“I think we still… have a little bit of a way to go on that front,” he says.
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