Home Blockchain JP Morgan’s Blockchain Head Thinks Most Crypto Is Just ‘Noise’

JP Morgan’s Blockchain Head Thinks Most Crypto Is Just ‘Noise’

JP Morgan’s Blockchain Head Thinks Most Crypto Is Just ‘Noise’

Umar Farooq, CEO of Onyx by JP Morgan and global head of payments for financial institutions, believes that “most crypto is still junk” except for “a few dozen tokens”.

In the green shoots of the Monetary Authority of Singapore Series 2022, Farooq said that while regulation hasn’t caught up, there aren’t many use cases for digitized tokens, adding, “Everything else [Cryptos], as has been mentioned, it’s either noise or frankly, you know, it’s just going to go away. So in my mind, the use cases haven’t fully emerged yet.

Exec believes regulated entities will be first

As the leader of a bank-led blockchain platform, Farooq also noted that while private options will always exist in the crypto industry, users will turn to regulated financial institutions when it comes to crypto. these will be “serious transactions” of high value. He pointed out: “You know, the government, the regulators and the whole financial infrastructure are supporting them.”

The executive’s comments follow MAS’ new announcement to regulate crypto with Ravi Menon, general manager of the watchdog stating that the agency will block crypto speculation but not crypto innovation.

On what is slowing the adoption of new technologies by financial institutions in an evolving regulatory space, Farooq explained that there are significant regulatory frictions, but for financial stability he does not think a level of friction higher is unjustified.

Recently, it was reported that the Monetary Authority of Singapore (MAS) was considering stricter rules to protect consumers. Under the new rules, the regulator could include customer suitability testing and limit the use of leverage and credit facilities for retail crypto investors.

“I think it’s obviously a bit more complicated given our regulatory regime and frankly that’s what makes us safe with the emerging technology in this industry. It also probably makes us a bit slower,” added Farooq.

The virtual asset industry is “not mature”

The Onyx chief is also of the opinion that the crypto industry “has not matured” and that most of the money “used in the current Web3 infrastructure is for speculative purposes”.

“Regulation has improved and I think that’s why you see the financial industry, in general, being a bit slow, catching up. But when it’s catching up, and whoever’s catching up…but the big institutions that are catching up on that will be the absolute winners,” added Farooq.

With this, Farooq also agreed that JP Morgan’s digital assets division should invest “very heavily” in building the infrastructure that enables the application of blockchain, but not so much in the application of blockchain technology. .

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