• By
  • Paul Vigna

Jamie Dimon isn’t very impressed by bitcoin. Bitcoiners, in turn, don’t appear terribly impressed by Jamie Dimon.


The virtual currency, which a year ago at this time was known only by a small band of enthusiastic libertarians, techies, and alleged drug traffickers, has gotten so much larger in the intervening time that it gets talked about at the big Capitalismpalooza called the World Economic Forum at Davos. That in itself is interesting.

But J.P. Morgan's Jamie Dimon and U.S. Treasury Secretary Jacob Lew were both asked their opinions and both talked it down, and both harped on its use in drug trafficking. The reaction from bitcoiners was just as dismissive.

“It’s a terrible store of value,” Mr. Dimon said in an interview with CNBC. “It could be replicated over and over.” He also noted that it doesn’t have government backing, and it’s been used by, yes, drug traffickers.

He noted that banks are under tremendous pressure to know who their customers are and to flag possible money launderers, and with bitcoin, he said, “that’s impossible.”

Mr. Dimon suggested that eventually bitcoin will be forced to adhere to government regulators, “and that will be the end of them.”

Mr. Lew said he shared Mr. Dimon’s take on bitcoin. “I’ve talked to Jamie Dimon about it. I think he and I both share a certain incredulity about the whole phenomenon.” What the government is most concerned about, he said, is that bitcoin “does not become an avenue to funding illegal activities.”

The reaction from bitcoiners was predictable. A number took to Twitter to respond. Jon Matonis, executive director of the Bitcoin Foundation, said dryly:

That last line was a reference to meetings Wells Fargo has convened lately to explore the alternative currency.

Erik Voorhees, co-founder of the bitcoin startup Coinapult and a well-known acolyte, was even more blunt:

Yes, bitcoin can be used to fund illegal activities, Mr. Voorhees said to MoneyBeat. For that matter, he added, so can a car. “The getaway car helps criminals get away from the scene of a crime,” he said, and indeed any useful technology, cars, cellphones, ATMs, can be used to help criminals.

“I was surprised by how negative he was,” Mr. Voorhees said of Mr. Dimon, feeling he was “clearly opposed to the whole thing.”

Mr. Voorhees acknowledged bitcoin can make money laundering easier. But that’s kind of the whole point of bitcoin, he said, that it makes moving money electronically easier for anybody using the system, whether or not they’re doing anything illegal.

It’s worth pointing out, too, that banks themselves have gotten into trouble for their role facilitating money laundering. HSBC in December pleaded guilty to allowing millions of dollars of Mexican and Colombia drug cartel money to be laundered through its banks, and since 2006 more than a dozen other banks have settled similar charges. J.P. Morgan settled charges of deficient money controls in 2012.

“Cash is the ultimate criminal tool,” Mr. Voorhees said.