From 'Bitcoin is a fraud' to a bank-issued coin

In 2017, Jamie Dimon looked into the camera and called Bitcoin a fraud. This was right after a huge bull run, and he sounded like a kid who had just found out Santa Claus isn't real and felt the need to ruin it for everyone else. That mix of confidence and disdain was everywhere on Wall Street.

For seven years, big banks repeated the same lines: Ponzi scheme, money laundering tool, casino for kids. Then quietly, JP Morgan's own blockchain division, Onyx, issued JPM Coin. It lets institutional clients transfer dollar deposits 24/7 on a private blockchain ledger. Dimon himself later admitted that deposit tokens and stablecoins are basically the same thing, and that JP Morgan wants to play on both sides.

This shift was not just JP Morgan. On July 9th, SWIFT, the messaging nervous system used by over 10,000 financial institutions, officially launched its own blockchain ledger pilot with 17 major banks including Citibank, HSBC, UBS, Standard Chartered, and Wells Fargo.

What Swift and the banks are actually building

Let me give the simplest example of tokenization. You deposit $100 into Citibank. Citibank gives you a token that represents those $100. You can then instantly move that token to another bank account inside the system, without waiting for traditional settlement.

The professional term is tokenized deposits. Swift's new system is basically a coordination layer on top of existing bank deposits. It wraps those deposits in a blockchain shell. When you want to pay a client at HSBC, the token gets confirmed in seconds and the recipient can use it immediately.

This logic is almost identical to stablecoins. The difference is that banks do not want to give up any control. They are trying to keep the benefits while holding on to every gate and every permission. It reminds me of an ex telling me we can stay friends, but only on their rules.

Institutional clients do not care what the underlying technology is called. They care whether someone can be held accountable if something goes wrong. That is exactly the biggest weakness of stablecoins, and it is why banks think they can win some business back. The original Swift network already delivered 75% of cross-border payments within 10 minutes, so the foundation was not bad.

The real fear behind the pivot

A lot of people think that when you swap $100 into USDC, that money has completely left the banks. It has not. After Circle and Tether receive those dollars, most of them still get parked back in commercial banks or used to buy US Treasuries. So banks never really lost the dollars themselves.

What they lost is control over who handles the movement of that money. In the past, every single payment had to go through a bank. Now more and more payments happen directly on stablecoin networks, bypassing banks entirely. Banks are realizing they are no longer the only gateway for money movements. That hurts more than losing deposits.

The slice of the pie they are trying to win back has grown to nearly $300 billion. That is the current total size of the global stablecoin market. The exact portion of money that has been slipping out of the traditional banking system.

Where bank tokens still fall short

Bank tokenized deposits sound powerful, but stablecoins still hold several structural advantages. I see four big cracks in the bank model.

  • Building blocks do not fit together. USDC can plug directly into decentralized protocols like Aave and Uniswap and combine like Lego bricks. A Citibank token only lives inside Citibank's own system. Outside that system, it does nothing.
  • Only the chosen ones get to play. Any developer can build products on top of USDC with no application required. Swift's chain is only open to those 17 banks, and the high barrier is built in on purpose.
  • Stablecoin liquidity has already escaped any single institution's control. Freelancers, fringe markets, and people without bank accounts have been using it for a while. Bank tokenized deposits stop working the moment they leave those 17 banks and the Swift system.
  • The ecosystem is already built around stablecoins. Developers, wallets, and exchanges have built an entire city around stablecoins with traffic lights already installed. Banks are only now drawing their foundation blueprints, and their business departments are probably still debating which fonts to use.

Who controls the next dollar?

On the surface, this looks like a fight over who can transfer money faster. In reality, it is a fight over who controls the next dollar. Banks used to control every payment. Stablecoins broke that monopoly. Now banks are trying to rebuild it with their own tokens.

Seven years ago, banks said crypto had zero value. Today, they are building their own blockchains. So the real question is no longer whether crypto will replace banks. The question is whether the banks of the future will start looking more and more like crypto.

There is an even deeper question: if every bank in the world eventually starts using blockchain technology, did the banks win or did crypto win? Did we win?

The next dollar is already being fought over

SWIFT's pilot may not sound like a revolution, but it is a public admission that crypto's core idea won. Bankers spent years calling Bitcoin a fraud. Now they are copying the mechanism with tokenized deposits while trying to keep the gates closed.

For me, the real takeaway is simple: the fight goes deeper than faster payments. It is about who gets to set the rules for money moving forward. Stablecoins showed that permissionless rails can work. Banks are now trying to take that proof and put it back inside a permissioned box.

The next dollar will not be decided by technology alone. It will be decided by whether people choose open systems they can build on, or closed systems they need permission to use.