Wall Street analysts throw cold water on J.P.Morgan's "cryptocurrency"

J.P.Morgan has had repercussions on the blockchain world by announcing the launch of his own "cryptocurrency", called JPMCoin.

The bank, led by Bitcoin Baskist Jamie Dimon, has long been involved in the blockchain market, but JPMCoin's announcement is arguably one of the most remarkable advances made by a Wall Bank. Street in the nascent market of digital assets. The new crypto, unlike Bitcoin, will not be publicly available, but will be used to settle a tiny fraction of JPM's cross-border payments with its customers.

"The promise of creating an ecosystem in which all participants can use a universally accepted and exchangeable digital currency is far from delivering on its promise," JPM veteran and chain music company founder Will Martino told The Block. Kadena. "It's more like a mechanism in which JPM will exchange a token that it will only issue on its platform."

"It's like being able to buy, play and cash in a specific casino," he added.

The cryptometer community has scrupulously examined the centralized nature of the project – many of them calling it a crypto-currency because it is not without permission. Nouriel Roubini, skeptic and crypto economist, called the project a "joke".

"This is a private, non-public, authorized unauthorized transaction, based on trusted authorities verifying the operation without trust, centralized non-decentralized," he said. stated in a tweet.

Others pointed out that J.P.Morgan's movement was not unique, with other financial companies having their own version of J.P.Morgan's new coin, such as Signature Bank. Signature Bank's Blockchain Signet System has integrated more than 100 customers who use it to send millions of dollars a day. There is also the USC project, which began in 2015 to apply DLT technology to the way central banks transfer funds.

The Block has contacted Wall Street world sources to find out the opinion of some analysts who cover the bank and provide investor clients with a target price analysis, which most have considered unimportant.

"The announcement is a non-event," said an analyst who declined to speak. "You may see slight efficiency gains relative to profit margins in their settlement-delivery business, but these numbers will not impact net results in the near future.

"You may not even be able to make short-term payments efficient!" Lex Sokolin, global director of Fintech strategy at Autonomous NEXT, told The Block, echoing the thinking of the company. aforementioned analyst.

Sokolin added, however, that the new initiative was still in its infancy. "The question that's asked is how much you can improve something (cross-border), but what you can build on a new architecture. My hunch is that it depends entirely on each bank's range of products and services, as well as its technological capabilities. "

Another analyst was not impressed by the news. "It sounds like a real-time payments game, and they even come without distributed ledger technology."

Nevertheless, some market observers had positive things to say about JPMCoin, including Andrew Keys, co-founder of ConsenSys Capital.

"The winners are JPM like [one of] the first to set up, JPM's customers who will have increased liquidity and lower settlement latency, and the Ethereum community as a support for technology. The losers are undoubtedly Ripple and R3, "said Keys.

Ripple, the financial technology firm behind the XRP cryptocurrency, has stood out among the cryptographic group for its ambition to associate with banks rather than overthrow the Wall Street Guardian. It offers a number of products using the XRP protocol to enable faster and cheaper international payments.