Reality check: Can Jamie Dimon (or anyone else) ‘close down’ crypto?

Strange moments abound in Capital Hill hearings, but even seasoned commentators were startled to see JP Morgan’s Jamie Dimon and Senator Elizabeth Warren linking arms over the dangers of cryptocurrency. Before the Senate Banking Committee, Dimon stated flatly of crypto: 'I would close it down.' Which begs two questions: What does he mean? And is it even possible?

The idea of banning cryptocurrency carries an allure for a wide, varied audience. Some on the paranoid right have suggested that the U.S. government will eventually ban Bitcoin and other cryptocurrency because they represent too great a threat to the state’s monetary control. Some on the jittery left have suggested that the U.S. government should ban crypto, because it is used almost exclusively by drug dealers and terrorists.

Crypto’s “strange bedfellows” power was on full display last week, during the Senate Banking Committee’s annual oversight hearing of the nation’s largest banks: Bank of America, BNY Mellon, Citigroup, Goldman Sachs, JPMorgan, State Street and Wells Fargo.

Senator Elizabeth Warren — a longtime critic of both crypto and big banks — managed to get each of the CEOs to pledge to root out any use of their financial networks to fund terrorism, and that any crypto company should have to follow the same anti-money laundering regulation that traditional banks have to follow.

Federal law enforcement officials have asked Congress to amend the Bank Secrecy Act, citing cryptocurrency as a way that terrorists get around being governed by the law. Warren acknowledged the oddity of the moment: “When it comes to banking policy, I am not usually holding hands with the CEOs of multibillion-dollar banks.”


continue reading »