“Most Of Crypto Is Still Junk,” JP Morgan Executive
- The CEO of Onyx and the Global Head of Financial Institution Payments, Umar Farooq, believe that most of the cryptocurrencies are just “noise.”
- Farooq claimed that there are only a few applications for digitalized tokens, adding, “Everything else is either noise or frankly, you know, it’s just going to go away.”
The CEO of Onyx by the American investment banking giant JPMorgan Chase & Co. and the Global Head of Financial Institution Payments, Umar Farooq, believe that most of the cryptocurrencies are just “noise.”
Although the law has not yet caught up, Farooq claimed that there are only a few applications for digitalized tokens, adding, “Everything else is either noise or frankly, you know, it’s just going to go away.” While speaking at the Monetary Authority of Singapore’s Green Shoots Series 2022, he said that the crypto use cases hadn’t been fully developed.
Farooq, who is in charge of a JP Morgan-led blockchain platform, added that although there will always be individual options available in the cryptocurrency market, people will choose regulated financial institutions for “serious transactions” involving significant amounts of money.
“You know, that the government, the regulators, and the entire financial infrastructure stands behind them,” he said, highlighting the importance of regulatory involvement in the industry.
Farooq explained that there is major regulatory friction, but he doesn’t think a higher level of friction is unjustified for financial stability. He believes that this regulatory friction is slowing down the momentum of financial institutions’ adoption of emerging technology in the evolving regulatory space.
“I think it’s obviously a little more complicated given our regulatory regime, and frankly, that is what makes us safe versus nascent technology in this industry. Probably also makes us a bit slower,”Onyx Exec continued.
The Onyx CEO also believes that the crypto market has “not matured” and that the majority of the funds “being used on the current web3 infrastructure” are “being used for speculative purposes.”
“The regulation has got up, and I think that’s why you see the financial industry, in general, being a little bit slow, catching up. But when it does catch up, and whoever catches up…but the large institutions who catch up to this are going to be absolute winners,”
Interestingly, the executive’s remarks come following the MAS’s recent announcement to regulate cryptocurrency. According to Ravi Menon, managing director of the watchdog, the organization aims to remove cryptocurrency speculation but not innovation. The regulatory body may ban the use of leverage and credit facilities for retail cryptocurrency investors and impose customer suitability checks as part of tougher regulations being explored to protect consumers.
Farooq concluded by accepting that the digital asset division by JP Morgan is dedicated to working ‘very heavily’ in building solid infrastructure.