Chase’s CEO Disses Bitcoin – But Already Has His Own Private Currency

Last week Chase’s CEO slammed bitcoin. He’s “skeptical authorities will allow a currency to exist without state oversight.”

Dimon said he’d fire anyone who traded bitcoin.

If a JPMorgan trader began trading in bitcoin, he said, “I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”

After Jamie Dimon’s remarks the price of bitcoin fell. Oh by the way JP Morgan reportedly bought bitcoin after his comments.

Copyright: jetcityimage / 123RF Stock Photo

The idea of private currencies shouldn’t surprise Dimon, though. After all, he already has his own.

Frequent flyer miles are hardly new, and bitcoin can’t inflate like American, Delta, and United can. And Chase has demonstrated a trustworthiness is maintaining the value of Ultimate Rewards points.

Naturally, most people have more trust in the “full faith and credit of the United States” than in an anonymous distributed group of miners and traders. But trust in digital currency is clearly building over time and is a self-reinforcing network. And one of the advantages of Bitcoin is that its total supply is fixed. A fiat currency, on the other hand, can be devalued by centralized monetary policy.

…Mr. Dimon is also too modest about JPMorgan’s own achievements in this arena. His firm conjured up its own currency: Chase Ultimate Reward points, its credit card loyalty program. Millions of customers have accumulated billions of points, trusting in Chase’s promise that this currency can be converted into cash or used for travel and other delights. And they hope that Chase won’t unilaterally choose to devalue them, while living with the risk that, unlike their bank accounts, the Federal Deposit Insurance Corporation provides no insurance for this valuable currency.

Of course in November 2014 Chase began to limit the ability of cardmembers to transfer Ultimate Rewards points to other people. It was a medium of exchange as people both transferred points to others and transferred points to others’ frequent flyer accounts. Still Chase transfer partner Hyatt still lets people move points to others’ accounts without restriction.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Actually, Gary, the anonymous source for your main quote (the trustworthiness of whom your reader cannot assess due to the anonyminity) erred on several fronts. First, the supply of bitcoin, etherium and litecoin — the current three virtual currencies — is not fixed. Hundreds of people are actively engaged in etherium and bitcoin “mining” – performing the highly complex calculations necessary to replicate the equations on which ethers and bitcoins are based. And computer hardware manufacturers are catering to this market. See, e.g.,,5211.html.

    Thus, bitcoin can inflate with the number of bitcoin miners, and the number of machines performing the calculations necessary to create bitcoins.

    Further, the value of bitcoins and ethers is highly variable, based on not only supply and demand, but also on the fact that bitcoins and ethers have neither physical form nor intrinsic value. Like Delta skypesos or Zimbabwean Dollars, bitcoins are a sort of fiat money – valuable only to the extent that someone will accept them in exchange for something useful – a liter of potable water, an airline ticket, or unique information.

    By the way, I am not taking you alone to the woodshed for the anonymity of the quote — merely pointing out that this is the result of the post-Watergate age of journalism. We are forced to place undue credence in the journalist’s evaluation of the source when the source is anonymous. We cannot ourselves evaluate the credibility of the source itself. In other words, is “a high administration source” someone who has the position and knowledge to speak with authority, or is it a janitor on the top floor of the building, or is it someone in middle management smoking weed? We’ll never know.

  2. Despite the apparent hypocrisy, I think Dimon might be right about Bitcoin. Ethereum, on the other hand, looks more promising IMHO because of smart contracts. I don’t see how smart contracts could fail to be implemented, in one way or another, in the not-so-distant future.

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