Financial giant J.P. Morgan is launching its own cryptocurrency asset – the first of its kind in terms of bank involvement.
J.P. Morgan might seem like the most unlikely party to create a cryptocurrency asset. Jamie Dimon, J.P. Morgan’s CEO, is known for his negativity toward bitcoin. In a September 2017 article, Fortune reported on Dimon calling BTC “a fraud.”
Although, the same article included details of Dimon’s apparent positive sentiment toward blockchain technology solutions, as seen in J.P. Morgan’s previous research and projects in the field.
J.P. Morgan’s new crypto asset
According to a February 14 report from CNBC, J.P. Morgan Chase has created JPM Coin, “[t]he first cryptocurrency created by a major U.S. bank.”
CNBC noted J.P. Morgan Chase transacts over $6 trillion per day globally in corporate funds as part of its large-scale payments operation. The company will test JPM Coin’s usage for a small percentage of its transaction bulk as part of an experimental phase coming later in 2019.
The entity sees large-scale application for a blockchain-based underlying system, according to J.P. Morgan’s head of blockchain projects, Umar Farooq. As quoted in CNBC’s coverage, Farooq 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.”
JPM Coin is a stablecoin, pegged with a direct 1:1 ratio with the U.S. dollar. CNBC explained the process, stating that:
clients will be issued the coins after depositing dollars at the bank; after using the tokens for a payment or security purchase on the blockchain, the bank destroys the coins and gives clients back a commensurate number of dollars.”
As far as sizeable global clients go, JPM Coin will reportedly settle much faster, utilizing an option other than the wire-based Swift transfer system.
Other mentioned application advantages included the areas of debt issuance, fund consolidation and efficiency.
Crypto Twitter’s response to JPM Coin
As usual, the crypto-space responded to J.P. Morgan’s news, showing it as one of the most conversed topics of the day.
Much of the sentiment included mentions of Ripple’s XRP. Common sentiment previously held that XRP, logically, might be of use for banks. However, there has been some confusion on the topic, as Bitcoinist explained in 2018.
Apparently, some large players would simply prefer to create their own asset, as seen in today’s news.
Mike Dudas, CEO of The Block, posted an interesting tweet today on the subject, expressing the concern of the XRP community:
— Mike Dudas (@mdudas) February 14, 2019
Additionally, the Crypto Monk, Bully Esq. and Collin Crypto posted their comedic thoughts on Twitter.
— The Crypto Monk ⛩ (@TheCryptoMonk) February 14, 2019
— ฿ully esq. (@BullyEsq) February 14, 2019
After the CEO continuously bashes #bitcoin at every opportunity while his firm fills orders, JP Morgan launches #JPMCoin, a stablecoin valued at $1 enabling payment transfers between their institutional accounts. #blockchain #cryptohttps://t.co/CfvUUtid0U
— Collin Crypto (@CollinCrypto) February 14, 2019
CryptoBull also charged in to fan the comedic flame with his tweet, criticizing the move towards crypto by a major bank.
Banks can now print their own money by issuing stablecoins. pic.twitter.com/UC0rJDCTO2
— Crypto฿ull (@CryptoBull) February 14, 2019