JP Morgan JP Morgan Chase, the global leader in banking and financial services, has revealed its plans to launch JPM Coin, a stablecoin-resembling token tied to the U.S. dollar. The company plans to start testing it for payment settlements later this year.
This token marks the beginning of a new era where a major American bank innovates a digital asset inspired by cryptocurrencies. The JPM Coin will function on the Quorum blockchain, a private version of Ethereum crafted by their tech team since 2016. There were discussions about making Quorum a separate entity.
JP Morgan is eyeing future tech strides as they consider enabling their digital coin to communicate with popular blockchain systems. JPM Coin will undergo limited testing for transaction processing, notable given the company's daily management of trillions of dollars.
Umar Farooq, the head honcho of JP Morgan's blockchain division, explained that initially, the JPM Coin would serve large-scale international settlements, expedite securities transactions, and diminish reliance on traditional dollar usage in their treasury operations.
Farooq explained, 'The possibilities are vast and varied, essentially any scenario involving corporate or institutional use of a distributed ledger can leverage this innovation.'
Later, Farooq mentioned, 'Almost every large corporation is our client, and we cater to many of the top banks worldwide as well.'
JPM Coin’s functionality relies on deposits; clients will gain access to tokens only after depositing conventional currency. These tokens can then be utilized for secure blockchain transactions. JP Morgan will remove or 'burn' equivalent tokens once a client withdraws their funds.
Mainstream Outlets Dub It Cryptocurrency, Specialists Disagree
By nature, blockchains are open, communal ecosystems. The notion is being widely discussed among cryptocurrency analysts and commentators. closed and permissioned Jerry Brito from Coin Center stated, 'People seem to label it as a cryptocurrency, but it truly isn't.'
Brito added, 'For a currency to be considered a cryptocurrency, it needs to be accessible and without barriers — no permissions, just the necessary tech to engage.'
Critics have raised queries about this project's real advantages, pointing out JPM Coin won't have the same perks as more decentralized cryptocurrencies.
Nathaniel Popper from the New York Times remarked on social media, 'JPMorgan's newer digital token mirrors most dollar-pegged cryptocurrencies with one major limitation — its scope remains confined within JPMorgan’s sphere.'
SWIFT's days could be numbered as new innovations, including the introduction of JPM Coin, bolster the array of competition out there.
Bad News for Ripple?
Cryptoverse payments play Ripple JP Morgan’s reach and influence in the financial world provide it an upper hand over Ripple, especially if they decide to fully integrate JPM Coin in their extensive global settlements network. As blockchain payment services proliferate, financial institutions will trust the JP Morgan name over startups like Ripple.
But it’s not just JPM Coin shaking up the competition landscape.
SWIFT has announced a connection of its Global Payments Innovation platform with Corda, a blockchain initiative from R3, a Ripple competitor, enabling blockchain-facilitated cross-border transactions.
Last month, SWIFT Ripple undoubtedly faces formidable competition encroaching upon its domain. Whether the company can endure this and emerge unscathed is yet a mystery.
William M. Peaster builds his career as a writer and editor immersed in Ethereum, Dai, and Bitcoin spheres. His work has surfaced in places like Blockonomi, Binance Academy, and Bitsonline. He pursues blockchain projects like smart contracts and dApps while advancing his skills in Solidity programming. Reach him via Telegram at @wmpeaster.
