On Thursday, JP Morgan announced that they had created the “JPM Coin.” This is an XRP like digital coin token which will be used to settle transactions instantly. This coin utilized Blockchain, which is a digital ledge technology which powers the major cryptocurrency projects. The JPM Coin is being addressed to as the crypto.
Roubini quickly tweeted about how the JP coin was a stable coin and not a cryptocurrency. He tweeted: “In which way has the new alleged JPMorgan crypto-coin anything to do with blockchain/crypto. It is private not public, permissioned not permissionless, based on trusted authorities verifying transaction not trustless, centralized not decentralized. Calling it crypto is a joke.”
However, JP Morgan provided a clarification that this new asset type was a “Stable Coin” and not a cryptocurrency. It provides for 1:1 redemption. They are using a permissioned blockchain network, and therefore only those customers who pass the institutional customer test will be able to gain access to it per the JP Morgan KYC standards.
Brad Garlinghouse, the Ripple CEO disagreed with the use cases of cryptocurrency. He stated that the project misses the point by tweeting: “As predicted, banks are changing their tune crypto, but the JPM project misses the point. Introducing a closed network today is like launching AOL after the Netscape’s IPO.” He further added that “After two years banks are still not the answer.”
According to Garlinghouse, XRP is the best shot that can genuinely help to bring payment systems into the modern era.
Joe Weisenthal, stated, “He fails to see Ripple’s XRP compete with the forthcoming JPM coin.”
Regardless of all criticisms, JPM coin is set to move into the real-world trials in just a few months. The bank keeps moving $6 trillion in a day as a part of their business and JPM coin will be used to settle transactions between the wholesale payments carried on by companies in real time.
Umar Farooq, the blockchain lead at JPMorgan states that there are three main use cases for the bank token like replacing wire transfers in international payments for large corporates, thereby cutting down on the settlement times from days to just a few moments. He also stated that it can be used in instant settlement of securities issuance and also to replace US dollars that are held internationally by major corporations who will be using JPMorgan’s treasury services.
It has as well been made clear that JP Morgan will not just back the greenback. The limited access factor about only institutional players will be able to transact remains the same.
