We just reported that JP Morgan Chase has launched its very own cryptocurrency that is based on the same structure as a stablecoin. The bank confirmed in its official announcement that,
“JPM Coin is a digital coin designed to make instantaneous payments using blockchain technology. Exchanging value, such as money, between different parties over a blockchain requires a digital currency, so we created the JPM Coin.”
“The JPM Coin isn’t money per se,” said Umar Farooq, head of Digital Treasury Services and Blockchain. “It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A. In short, a JPM Coin always has a value equivalent to one U.S. dollar.”
Now, as the largest bank in the US rolls out its own cryptocurrency for payments, the crypto community has started mocking Ripple and its digital asset XRP.
Crypto OG, Whale Panda stated, “If you listen very carefully you will hear all Ripple holders now scream in agony. Congrats jpmorgan on creating a useless shitcoin.”
CNBC crypto trader host, Ran Neu Ner quipped, “I wonder why they don’t just use XRP!”
“Because the use case is different. Internal settlement isnt cross border / multi-entity settlement. Being pegged to the USD is another name for stablecoin. Bank issued DAs carry counter party risk. This has nothing to do with XRP but is bullish for XRP and the market as a whole,” replied ecent, an XRP enthusiast.
He further replied, “When JP Morgan is happy to issue what it calls a crypto, its good for everyone. For a moment try to put the tribalism aside.”
Crypto trader, Alex Kruger further stated, “this JPM Coin is the first big public step taken by one of the major banks against Ripple’s ambitions.”
In response, an XRP enthusiast replied, “No, it’s not. Again, it’s an IOU. It’s not that hard to understand.” He further added, “As a smaller bank you don’t want to deal in IOUs issued by JP Morgan.”
XRP supporters further shared Ripple CEO Brad Garlinghouse’s LinkedIn article titled, “The Case Against BankCoin” from back in 2016 when UBS, Deutsche Bank, Santander, and BNY Mellon announced their “utility settlement coin” for blockchain settlement.
Also Read: JPMorgan Launches JPM Coin, World’s First Bank to Launch Cryptocurrency
Talking about the bank-issued digital asset that can only “really efficiently settle between bank who issued it,” Garlinghouse presented two scenarios that could play out.
“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.”
With this he said, would sprout many problems involving creating a market of unique digital assets among other issues which would be a mess.