Royal Bank of Canada's David McKay said he has "real concerns" about bitcoin. But unlike JPMorgan Chase's Jamie Dimon, fraud isn't one of them.
"I would never call it a fraud because it's not misrepresenting what it is," McKay, the lender's chief executive officer, said Monday in an interview in Toronto after announcing a blockchain partnership with the U.S. bank. "People have placed value on what it is in different ways — and they're fine to do that — but it's not fraudulent in its misrepresentation."
Last month, Dimon called bitcoin "a fraud," and "worse than tulip bulbs" at an investor conference in New York, saying he would fire any employee trading the cryptocurrency for being "stupid." The JPMorgan CEO repeated much of his September rant on Friday at the annual meeting of the Institute of International Finance in Washington, saying that governments will crush it one day and calling it a "great product" for criminals. He ended his latest diatribe with a new vow — it's the last time he talks about bitcoin.
"There's so many elements of a bitcoin that don't convene to our current perspective on what a unit of currency should do," McKay said. "There are some real concerns about how the bitcoin is being used that we have to resolve."
Royal Bank and JPMorgan, along with Australia and New Zealand Banking Group Ltd., said earlier Monday that they're starting a network that uses blockchain technology to handle cross-border payments for correspondent banking. The so-called Interbank Information Network aims to allow payments to reach beneficiaries faster with fewer steps and better security, New York-based JPMorgan said in a statement.
"We're on a journey to look at the strengths and weaknesses, the security protocols," McKay said of the announcement. "You've got three banks that are off the ground and running in cross-border payments, so you've got to test it with partners and we certainly want to be part of that."
Royal Bank is already using blockchain technology to move payments between its Canadian and U.S. operations, and has plans to use the technology for its Canadian loyalty program in future.
