JPMorgan Chase (JPM) CEO Jamie Dimon said in his annual letter to shareholders that the bank must move faster to keep up with blockchain-based rivals as tokenization reshapes parts of the financial system.
“New competitors based on blockchain are emerging, including stablecoins, smart contracts and other forms of tokenization,” Dimon wrote, viewing the technology as a direct challenge to the traditional banking model.
He added that these technologies, along with fintech companies, “could change the fundamental nature of how this is all done,” referring to core banking functions such as payments, trading and asset management.
Dimon’s response was not to deny the shift but to accelerate JPMorgan’s own efforts. “We need to launch our own blockchain technology and constantly focus on customer needs,” he said.
The comments come as tokenization – turning assets such as money market funds, bonds or real estate into blockchain-based tokens – has become a focus for cryptocurrency companies and large financial institutions.
Major players including BlackRock, Franklin Templeton and Goldman Sachs have launched or tested tokenized funds in the past year. Crypto-native companies are also making inroads into the space, offering blockchain-based versions of traditional financial products that can run continuously and settle almost instantly.
JPMorgan has spent years building blockchain infrastructure through its Onyx unit (now branded Kinexys), with products designed to reflect core banking functions on the new track. Its flagship product, JPM Coin, is a bank-issued stablecoin that enables institutional clients to move funds instantly, replacing slower internal transfers. The bank has also promoted the tokenization of traditional assets, launching pilots to convert instruments such as government bonds and money market funds into blockchain-based tokens that can be transferred and used as collateral in near real-time.
Dimon said the shift from legacy products to blockchain-based versions has put pressure on banks. Faster settlements can reduce fees associated with payments and transactions, while tokenized systems can allow assets to be transferred directly between users. Stablecoins act as digital dollars and are also potential alternatives to bank deposits.
Dimon does not endorse crypto assets such as Bitcoin In the letter, the focus is on the underlying infrastructure and its impact on competition. He noted that clients are increasingly seeking guidance in areas such as “digital assets,” a sign of growing institutional interest even as banks remain cautious.
Beyond technology, Dimon is also cautious about the economy. He warned that geopolitical tensions, including conflicts in the Middle East, could lead to “significant sustained shocks to oil and commodity prices” and lead to “increased inflation and ultimately higher interest rates than markets currently anticipate.”
He also cited high asset prices and global debt levels as risks, suggesting markets may be underestimating potential volatility.
Still, the letter makes clear that emerging financial infrastructure — not just macro conditions — is shaping JPMorgan’s strategy. As tokenization grows in popularity, Dimon said the bank views the shift as structural rather than cyclical.