š„J.P. Morgan’s Blockchain Lead Believes Most of Crypto Is Just ‘Noise’š„
Umar Farooq, the CEO of Onyx by J.P. Morgan and the Global Head of Financial Institution Payments, believes that āmost of crypto is still junkā with the āexception of a few dozen tokens.ā
In the Monetary Authority of Singaporeās Green Shoots Series 2022, Farooq stated that while the regulation has not caught up, there are not many use cases of digitalized tokens, adding, āEverything else [Cryptos], as has been mentioned is either noise or frankly, you know, itās just going to go away. So, in my mind, the use cases havenāt arisen fully.ā
Exec believes regulated entities will be frontrunners
As the lead of a bank-led blockchain platform, Farooq also remarked that while private options will always exist in the crypto sector, users will turn to regulated financial institutions when it comes to āserious transactionsā of large value. He underlined, āYou know, that the government, the regulators, and the entire financial infrastructure stands behind them.ā
The executiveās comments follow MASā new announcement to regulate crypto with Ravi Menon, managing director of the watchdog stating the agency will block crypto speculation but not crypto innovation.
On what is slowing down financial institutions from the adoption of new technology in the evolving regulatory space, Farooq explained that there is significant regulatory friction, but for financial stability, he doesnāt believe a higher level of friction is unjustified.
Recently, it was reported that the Monetary Authority of Singapore (MAS) is considering stricter rules to protect consumers. Under the new rules, the regulator could include customer suitability tests and limit the use of leverage and credit facilities for crypto retail investors.
āI think itās obviously a little bit more complicated given our regulatory regime and frankly, thatās what makes us safe versus nascent technology in this industry. Probably also makes us a bit slower,ā Farooq added.
Virtual asset industry ānot matureā
The Onyx chief is also of the view that the crypto industry has ānot matured,ā and most of the money thatās ābeing used in the current web3 infrastructure is for speculative purposes.ā
āThe regulation has got up and I think thatās why you see the financial industry, in general, being a little bit slow, catching up. But when it does catch up, and whoever catches upā¦but the large institutions who catch up to this are going to be absolute winners,ā Farooq added.
With that, Farooq also accepted that JP Morganās digital asset division has been investing āvery heavilyā in building the infrastructure that enables blockchain application but not so much in applying blockchain technology.
https://beincrypto.com/j-p-morgans-blockchain-lead-believes-most-of-crypto-is-just-noise/