JP Morgan Launching First-Ever US Bank-Backed Cryptocurrency

JP Morgan says that its cryptocurrency could serve as a sort of corporate stablecoin. | Source Shutterstock

JP Morgan says that its cryptocurrency could serve as a sort of corporate stablecoin. | Source Shutterstock

What Does JP Morgan Mean by 'Cryptocurrency?' It will be launched in a test mode in the coming months. In a surprise move, the investment bank has launched a stablecoin like token which will be used anywhere from settling cross border payments to using the bank's treasuries.

Mr Farooq added: "Pretty much every big corporation is our client, and most of the major banks in the world are, too". Ripple now have another huge contender (as do SWIFT for that matter). "Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients' counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer".

The first is for global payments for major corporate customers, and instead of often taking more than a day to settle because institutions have cut-off times for transactions and countries use different systems, payments will settle in real time that same day.

Ripple saw this as a gap in the market, swooping in to offer their expertise in blockchain technology and even offer some instant liquidity solutions in the form of XRP and its integration within one of the firm's remittance solutions, xRapid.

"The JPM Coin isn't money per se".

According to an FAQ released by JPMorgan later Thursday, JPM Coin will initially run on top of Quorum, the private version of ethereum the bank developed in 2016 in conjunction with EthLab - but not exclusively.

This is a major breakthrough in the future of cryptocurrency, which has so far been mostly shunned by the global banking industry who saw it as a risk not worth taking, while its price rate plummeted throughout past year. It has been trying to find a way to match the speed of settlement that digital currencies offer.

Further, JPM Coin won't just be used to represent greenbacks.

While Jamie Dimon constantly avoiding the growth of Bitcoin, the managers and engineers at NewYork based bank have always been optimistic towards the underlying technology and digital currency at large. It stands firmly as recognition of this innovative and game-changing technology, furthering the legitimacy of crypto in the wider financial industry.

A year ago also saw the bank's co-president Daniel Pinto go on record to admit cryptocurrency "will play a role" in the future global economy.

Furthermore, as briefly touched upon this new interdiction of, what is an essentially a glorified stablecoin, will most likely only dilute the current supply of crypto rather than destroy it altogether, although those with hopes of a bitcoin reserve currency may have to put their ideas on the backburner while we see just how this now bank backed crypto turns out.

"IIN transfers information, not payments, between correspondent banks".

"The JPM Coin isn't money per se".

While speculation of JPM Coin continues to circulate, only time will truly tell what kind of impact the crypto will have on the large cryptocurrency ecosystem.

So if you have a JPMorgan Chase checking or savings account, the coin is not for you.

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