The Emerging Crypto Banking Cartel

Commercial Agenda vs. Open Source Crypto Ethos. There’s nothing wrong with for-profit companies seeking to maximize profit as long as they’re doing it in an ecosystem-sustainable way, just like there’s nothing wrong with sharks eating baby seals in an ecosystem-sustainable way. We all know sharks have to eat because that’s what sharks do. However, the R3 consortium tries to pretend they’re part of the open source software community, when in fact, they’re blatantly hijacking the community to continue exploiting the human populations that are suffering from their monopolistic influence over the global economy. Nevertheless, despite their exploitative agenda, it should still be acknowledged that R3’s announcements were a significant factor in bringing the concept of blockchains and cryptocurrencies into the mainstream public consciousness.

Cryptocurrencies Are a Threat to the Banking Cartel. It’s clear to anybody who understands how banks work that cryptocurrencies are a serious threat to the banking cartel; so, we should expect banks to do everything possible to prevent the widespread adoption of cryptocurrencies. However, other firms in the financial services industry who are not as dependent upon a fiat currency monopoly are much more bullish on the future of cryptocurrencies, even though blockchain technologies do potentially threaten their business models. For example, Jeffrey Sprecher, CEO of Intercontinental Exchange, which owns the New York Stock Exchange, said in an interview on Bloomberg TV:

People put more faith in a guy named Satoshi Nakamoto [Bitcoin’s inventor] that no one has ever met than they do in the U.S. Fed. . . . People are more comfortable in technology than the institutions of government and society that I grew up with.[1]

The Banking Cartel’s Strategy: Bash Bitcoin Publicly While Buying It Privately. Sprecher’s statement is a dramatic contrast to the negative statements made by many executives in the banking industry, including CEO of JPMorgan Chase, Jaime Dimon. For example, Mr. Dimon called Bitcoin “a fraud” and said he would “fire in a second” any J.P. Morgan employee who trades Bitcoin because “it’s against our rules and they are stupid.”[2] And yet, while Dimon’s public Bitcoin-bashing was pushing the market price of Bitcoin down, his J.P. Morgan Securities division was quietly buying Bitcoin and Bitcoin futures[3].[4]

The Banks Reveal Their Hypocrisy & Blatant Self-Interest. After publicly bashing cryptocurrencies for years, J.P. Morgan and other banks have been privately building their own blockchain projects for years. Now, the J.P. Morgan website prominently displays news headlines like “How J.P. Morgan is Leading the Digital Revolution” and “J.P. Morgan demonstrates the potential of blockchain-based prototype,” which of course is based on almost completely on a crippled version of the Ethereum blockchain.[5]

Banks Ban Cryptocurrencies Until They Can Dominate the Crypto Market. In another blatantly self-serving maneuverer, major banks have arbitrarily banned all their customers from buying cryptocurrencies with their credit cards. Virtually all the largest credit card issuing banks have colluded in a cartel to prohibit their customers from purchasing cryptocurrencies. “At this time, we are not processing cryptocurrency purchases using credit cards. . . .” said J.P. Morgan. Bank of America also said in an email to CNBC that the bank will decline all credit card purchases of cryptocurrencies. Citigroup said, “We have made the decision to no longer permit credit card purchases of cryptocurrency. We will continue to review our policy as this market evolves.[6][7]

Bankers & the Media Are Finally Revealing the Truth. The mainstream media has generally accepted the banking cartel’s negative attacks as gospel until very recently. However, since early 2018, the mainstream media finally seems to be taking cryptocurrencies seriously and they are starting to report on the blatant hypocrisy in the banking industry. For example, several mainstream news outlets have reported on recent admissions by Goldman Sachs, Bank of America, and JPMorgan Chase regarding how cryptocurrencies are a serious risk to their business models.[8] They also reported on how Jamie Dimon now regrets calling Bitcoin a “fraud[9].[10]” It’s encouraging to see these organizations finally acknowledging the truth after more than a decade of lies and fear-mongering.[11]


Notes:
[1] ICE’s Chief Says Crypto Trading Is a ‘Trend We Can’t Ignore.’ (2018, April 9). Bloomberg.Com.  https://www.bloomberg.com/news/articles/2018-04-09/ice-s-chief-says-crypto-trading-is-a-trend-we-can-t-ignore

[2] Imbert, F. (2017, September 12). JPMorgan’s Dimon: Bitcoin is a fraud that will eventually blow up.  https://www.cnbc.com/2017/09/12/jpmorgan-ceo-jamie-dimon-raises-flag-on-trading-revenue-sees-20-percent-fall-for-the-third-quarter.html

[3] Redman, J. (2017, September 16). After the Boss Calls Bitcoin a “Fraud” — JP Morgan Buys the Dip.  https://news.bitcoin.com/after-the-boss-calls-bitcoin-a-fraud-jp-morgan-buys-the-dip/

[4] Osipovich, A. (2017, November 21). Maybe Bitcoin Isn’t Untouchable at J.P. Morgan After All. Wall Street Journal. https://www.wsj.com/articles/maybe-bitcoin-isnt-untouchable-at-j-p-morgan-after-all-1511289925

[5] JPMorgan mulls spin-off of blockchain project Quorum: sources. (2018, March 22). Reuters. https://www.reuters.com/article/us-blockchain-jpmorgan/jpmorgan-mulls-spin-off-of-blockchain-project-quorum-sources-idUSKBN1GY36O

[6] Cheng, E. (2018, February 2). JPMorgan Chase, Bank of America bar bitcoin buys with a credit card. https://www.cnbc.com/2018/02/02/jpmorgan-chase-bank-of-america-bar-bitcoin-buys-with-a-credit-card.html

[7] Major Banks Ban Buying Bitcoin With Your Credit Card. (2018, February 4). http://fortune.com/2018/02/04/banks-ban-buying-bitcoin-credit-card/

[8] JPMorgan Chase Admits Cryptocurrency Is a “Risk” to its Business for the First Time. (2017, February 27).  http://fortune.com/2018/02/27/cryptocurrency-jp-morgan-risk/

[9] Martin, K. (2018, January 9). JPMorgan Chase CEO Jamie Dimon regrets saying Bitcoin is a “fraud,” but still isn’t interested in it.  http://foxbusiness.com/markets/jpmorgan-chase-ceo-jamie-dimon-regrets-saying-bitcoin-is-a-fraud-but-still-isnt-interested-in-it

[10] Kim, T. (2018, January 9). Jamie Dimon says he regrets calling bitcoin a fraud.  https://www.cnbc.com/2018/01/09/jamie-dimon-says-he-regrets-calling-bitcoin-a-fraud.html

[11] Even the industry’s most conservative trade journal, American Banker, has accpeted the undeniable legitimacy of cryptocurrencies. See: “JPMorgan: Cryptocurrencies ‘could have a role’ in investor portfolios.” https://www.americanbanker.com/news/jpmorgan-cryptocurrencies-could-potentially-have-a-role-in-investor-portfolios



About Ferris Eanfar

Ferris Eanfar has over 20 years of experience in technical, financial, media, and government intelligence environments. He has written dozens of articles and several books in the fields of International Political Economy and blockchain/cryptocurrencies. Ferris is the author of the Global Governance Scorecard, the Blockchain Cryptonian, and Broken Capitalism: This Is How We Fix It, which provides unique insight into what is wrong with the global economy and how to fix it. Ferris is also the CEO of the AngelPay Foundation, a nonprofit financial services company with a mission to “return wealth and power to the creators of value.” To learn more about Ferris, please visit the About Ferris page.

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