JPMorgan’s Blockchain Head Says Most Crypto Is Still Junk

JPMorgan’s Blockchain Head says most crypto is still junk and that it lacks a use case.  Umar Farooq, the head of JPMorgan’s digital assets arm, has claimed that the majority of crypto assets on the market are “junk” and that true crypto use cases have yet to emerge.

Farooq noted at a panel discussion at the Monetary Authority of Singapore’s Green Shoots Seminar on August 29 that regulation has yet to catch up to the booming industry, which is preventing many conventional financial (TradFi) institutions from getting engaged.

He also believes that, with the exception of a handful, most crypto assets lack utility:

“Most of crypto is still junk actually, I mean with the exception of I would say, a few dozen tokens, everything else that has been mentioned is either noise or frankly, is just gonna go away.”

“So in my mind, the use cases haven’t arisen fully, and the regulation hasn’t caught up and I think that’s why you see the financial industry, in general, being a little bit slow in catching up,” added Farooq.

Farooq serves as the CEO of Onyx Digital Assets (ODA) which is JPMorgan’s blockchain unit. JPMorgan’s Blockchain Head says most crypto is still junk and no one can convince him otherwise.

The JPMorgan executive further contended that the industry hasn’t developed sufficiently to be used at scale to support high-value “serious transactions” across TradFi institutions or to host products like tokenized deposits (an existing bank deposit held as a liability against depository institutions).

Instead, Farooq believes crypto, blockchain, and the larger Web3 trend are mostly used for speculative speculation at this point.

“You need all of those things to mature so that you can actually do things with them. Right now, we’re just not there yet, most of the money that’s being used in Web3 today, in the current infrastructure, is for speculative investment.”

While JPMorgan has grown more crypto-friendly in recent years, the banking behemoth is particularly interested in blockchain technology and how it can be used to specifically improve TradFi services.

It was reported in May of this year, that JPMorgan trialed tokenized collateral settlements. They did this via their own private blockchain. The test that was performed, saw two of its own entities transfer a tokenized representation of Black Rock Inc. share (money market fund shares).

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