Umar Farooq, Chief Executive Officer of JPMorgan’s blockchain unit, believes that real use cases of crypto are yet to unravel while most of the existing assets are “junk” with only a few exceptions.

Speaking at the Monetary Authority of Singapore’s (MAS) Green Shoots seminar on Monday, Farooq said that the regulation has also not caught up with the burgeoning sector, thereby obstructing the foray of several many traditional financial institutions.

“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.”

Regulated Entities For The Win

Farooq, who happens to be the heading of JPMorgan’s Onyx, said that users would eventually move to financial institutions that are regulated to conduct “serious” large-value transactions primarily because the infrastructure will be backed by the government and regulators. Having said that, the exec remarked that private options will always exist in the sector.

While arguing that the sector has not matured enough, the  JPMorgan executive went on to say that a major chunk of the capital in the Web 3 ecosystem at this stage is for speculative activities.

“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.”

JPMorgan Ever Changing Crypto Stance

Farooq’s comment follows MAS’s new directive wherein it revealed plans to shut off crypto speculation but not stifle crypto innovation. In the seminar itself, the Singaporean financial regulators have projected a consistent message that while the digital asset industry as a whole holds much promise, trading in cryptocurrencies is risky for non-professional investors. JPMorgan’s own views mirror the prevalent sentiment.

Even though the multinational investment bank has warmed up to crypto, it has kept its focus fixated on blockchain tech. As such, it carried out a pilot transaction where two of its entities transferred the tokenized representation of asset manager – BlackRock Inc. money market fund shares as collateral on its private blockchain. JPMorgan had claimed that it achieved “frictionless transfer of collateral assets on an instantaneous basis.”

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