Jamie Dimon recognized the value of decentralized finance
J.P. Morgan CEO and renowned crypto skeptic Jamie Dimon has acknowledged that blockchain and decentralized finance applications have value. This is stated in a letter from the top manager of the investment bank to shareholders.
“Decentralized finance and blockchain are real. These are new technologies that can be used both privately and publicly, with the need to obtain permission or not,” said Dimon.
In addition, he noted that J.P. Morgan is at the forefront of technology development. According to Dimon, the bank uses “a blockchain network called Link to allow banks to exchange complex information and also to move tokenized US dollar deposits using JPM Coin.”
In his opinion, there are various scenarios that allow distributed ledger technology to replace or improve current aspects of work, such as the execution of smart contracts and information ownership. But, the financier believes, for some tasks, the new technology is “too expensive or slow.”
But analysts at Morgan Stanley noted in a recent report that the growth of the DeFi industry should not be expected in the near future. By their own admission, experts see no evidence that decentralized finance protocols are more efficient than existing systems.
Experts have pointed out that today DeFi only caters to protocol operators who make a profit, not users. In addition, threats of hacking and theft are associated with decentralized finance.
Morgan Stanley believes that limited customer information and the lack of a transparent anti-money laundering mechanism in the future will significantly slow down the adoption of DeFi by institutions. And if the requirements of AML and KYC are actually implemented, it will negatively affect decentralization, and this market will lose one of the key benefits for users.
“The overcollateralization of loans suggests that DeFi lending does not increase the money supply. That is, without centralization, customers will not consider decentralized finance as an alternative to the current banking system,” Morgan Stanley said in a report.
Do you agree that DeFi will remain a relatively small industry in the coming years?
