- JP morgan becomes the first US bank to announce their own cryptocurrency
- The Coin ‘JPM’ is priced at 1 dollar per coin and will be a stable coin
- The coin is developed on the “Quorum” platform and will be supporting other platforms later down the road
JP Morgan, one of the largest American multinational bank and financial services companies just announced on Thursday the first Cryptocurrency by an American banking giant. They have been looking forward to this for a long time and have finally made the move. ‘Umar Farooq’, head of J.P.Morgan’s Blockchain projects told CNBC that a part of it’s huge $6 trillion in daily transactions will be conducted in the fresh new ‘JPM Coin’ to settle international payments anytime in a matter of seconds. It will also be used to transact securities and for corporations using the bank’s treasury services, said the bank in a blog post on their web portal. Farooq, in his interview to CNBC told that:
“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.”
The first ‘bank coin’ will be a stable coin
As each JPM coin is valued equivalent to one US dollar, it shares the characteristics of a stable coin. CNBC elaborated that “clients will be issued coins after depositing dollars at the bank; after using the tokens for payment or security purchase on the Blockchain, the bank destroys the coins and gives clients back a commensurate number in dollars.”
It was previously rumored back in January that JP Morgan was planning on launching its own stable coin. When ‘Brian Marchinoy’, the bank’s representative was approached by media he said that the firm had no such plans. ‘Christine Moy’, head of the banks Blockchain team reported on Thursday that “it wasn’t up for announcement at the time of inquiry.”
The company plans to begin trial in the coming weeks and this will mark as a huge step for Cryptocurrencies as it will be one of the first real-use application of Cryptocurrencies in a major banking system. JPM coin will primarily be issued on ‘Quorum’, which is an “enterprise-focused version of ethereum” and “subsequently extended to other platforms” and “operable on all standard Blockchain networks.” Farooq says that some of the key applications he sees for JPM are “international payments for large corporate clients”, “securities transactions” and for clients that use the company’s treasury service and could hold JPM instead of dollars. He also says there are possibilities of JPM being used for “payments on internet connected devices”.
Hypocrisy in action
This news came as a shock to many because Chairman of JP Morgan ‘Jamie Dimon’ up until now has shown no support towards Cryptocurrencies of any sort. He targeted Bitcoin specifically and even called it “a fraud”. On September 13th 2017, he called Bitcoin “a fraud” and added that it was “worse than tulip bulbs.” He got pretty serious and said if a JP Morgan trader began trading in Bitcoin he would “fire them in a second. For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.” Further on he said “if you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in Bitcoin than U.S dollars. So there may be a market for that but it’d be a limited market”.
Afterwards in January 2018 in an interview with FOX he was seen telling “The Blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s you have to look at individually. The Bitcoin to me was always what the governments are gonna feel about Bitcoin as it gets really big, and I just have a different opinion than other people. I’m not interested that much in the subject at all.” Again in July in an interview conducted by the Harvard Business Review he said “I probably shouldn’t say any more about Cryptocurrency. But it’s not the same as gold or fiat currencies. Those are supported by the law, police, and courts. They’re not replicable, and there are strictures on them. Blockchain, on the other hand, is real. We’re testing it and will use it for a whole lot of things.”
But let’s look at the bright side of the picture here. This is a huge achievement for the Cryptocurrency industry as a whole. JP Morgan has been heavily involved in Blockchain research. Its very own ‘Blockchain Centre of excellence’, leads all efforts for applications of distributed ledger technology and they already have a running product as mentioned earlier “Quorum”. So we can consider this event one of those very first events that actually brings about the mass adoption of Cryptocurrencies.