American multinational investment bank and financial services company, J.P. Morgan Chase, has concluded plans to introduce the first cryptocurrency generated by a major United States bank. The cryptocurrency which will be called “JPM Coin” will be tested in an experimental period set to commence in a couple of months.
How JPM Coin Will Be Introduced
Every day, J.P. Morgan pushes at least $6 trillion in business transactions around the globe. This is majorly for big organizations in the bank’s enormous wholesale payments business. The bank intends to use its new cryptocurrency to run a small percentage of these transactions. The token was designed by the company’s own engineers for quick transaction settlements to be more easily done among customers.
Speaking on the prospects of the new cryptocurrency, Umar Farooq, J.P. Morgan’s head of blockchain projects, has expressed optimism about its use and application. He said:
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction. The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this.”
This however might come as a bit of a shock because just last year, J.P. Morgan was one of three lenders who outrightly banned their credit card customers from investing in bitcoins.
Bank Coins and their Effect
As much as many think cryptocurrency created by banks is a fantastic idea, there still are others who think it’s a terrible notion. Back in 2016, Brad Garlinghouse – CEO of Ripple – argued on an op-ed he wrote, that a “bank-issued digital asset can only really efficiently settle between the banks who issued it.” This he said in response to the announcement of a
“Utility Settlement Coin”, a collaborative effort by a combination of UBS, Santander, Deutsche Bank and BNY Mellon.”
Garlinghouse then goes on two posts only two possible scenarios, predicting that the end result might be chaos. According to a Linkedin post by Brad Garlinghouse,”
“Scenario one: all banks around the world put aside competitive and geopolitical differences, adopt the same digital asset, agree on its rules, and harmoniously govern its usage. Fat chance.
Scenario two (the more likely scenario): banks not in the issuing group issue their own digital assets with their own sets of rules and governance.”
The result, Garlinghouse believes, would be
“an even more fragmented currency landscape than what we have today. If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!”
Universality, according to Garlinghouse, is one of the most important features of a proper digital asset and Ripple’s XRP is the prime example of that.
XRP Compared With Bank-Issued Crypto
In the concluding part of the Garlinghouse op-ed, he made a strong case for XRP describing it as a truly “Independent digital asset.” He says:
“It goes back to the fundamentals of what makes digital assets unique and special – they’re universal currencies, meaning anyone can use them as units of value anywhere in the world. That universality gives digital assets global reach and the ability to settle much faster than traditional assets.
Compared head to head with other independent digital assets (like bitcoin or ether), XRP settles the most efficiently cross-border, in just seconds. In fact, we’ve run tests with global banks to prove XRP can lower liquidity costs for cross-border trades. More to come on that front.”
Here's the Best JPM Coin Reactions from Crypto Twitter
would you like to talk to someone about the difference between JPM coin and Bitcoin. (there’s a big one!)
— Neeraj K. Agrawal (@NeerajKA) February 14, 2019
If JPM Coin is a cryptocurrency, then so is Fortnite V-Bucks.
— Jerry Brito (@jerrybrito) February 14, 2019
If it turns out that the Blockchain/Coin framework turns out to be a good one for banks transferring money around, then the JPM Coin should absolutely obliterate Ripple
— Joe Weisenthal (@TheStalwart) February 14, 2019
The most popular token for money laundering this year will be JPM Coin
— Pomp 🌪 (@APompliano) February 14, 2019
JP Morgan is creating their own "cryptocurrency" called JPM Coin.
They will be the first US bank to use a digital token to settle transactions between clients.
At first they ignore you,
then they laugh at you,
then they fight you, <—-
then they just buy bitcoin.
— Alec Ziupsnys (@AlecZiupsnys) February 14, 2019
Let me save @bgarlinghouse the 45 seconds.
JPM coin is only issued by, only transfered by, and only redeemable by….wait for it…JP Morgan.
Its a routing number on a private Blockchain.
It only has value…inside of JP Morgan.
Here's an illustration for you.
You're welcome pic.twitter.com/X9APzdNci1
— Will Smith (@Sarcasticlegend) February 14, 2019
It appears that JPMorgan's new cryptocurrency, JPM Coin, is just like all the other cryptocurrencies tied to the value of a dollar, but less useful, because it can't move anywhere beyond the walls of JPMorgan. https://t.co/K3Svy5fREH
— Nathaniel Popper (@nathanielpopper) February 14, 2019