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On Feb. 14, giant bank JP Morgan announced its intention to issue its own digital coin "to run on its Quorum internal blockchain.The coin will be indexed 1: 1 to the US dollar, JP Morgan using the considerable weight of its balance sheet to ensure the investment, will not suffer the huge fluctuations in value that can make crypto-currencies unreliable for payments.This is what is called in the world of cryptography a "stablecoin", and not a cryptocurrency – a digital token that represents a fiduciary currency.
The exact impact of "JPMCoin" on the crypto-currency landscape is not clear. The opinion is shared between those who think that JPMCoin is a serious threat to Ripple and, to a lesser extent, Bitcoin and Ethereum, and those who think that it is a non-event. Who is right?
The JP Morgan logo appears on an Android mobile phone. & Nbsp; Photo Credit: LightRocket via Getty ImagesGetty
It all depends on how the room is used and who uses it. In one Q & A usefulUmar Farooq, Head of Digital Treasury Services at J.P. Morgan and Blockchain, explains how J.P. Morgan's customers would use this coin:
When one customer sends money to another via the blockchain, JPM coins are transferred and exchanged instantly for an equivalent amount in US dollars, reducing typical settlement time.
This is very similar to Ripple's xRapid, which uses XRP encryption as an intermediate currency. To send money with the help of xRapid, a customer exchanges the fiduciary currency against XRP, the XRP certificate is transferred, and the recipient uses the XRP code for the fiduciary currency. Of course, the difference is that XRP is not a stablecoin. It is a negotiated instrument whose price can fluctuate considerably. In today's fast-changing currency markets, the price can change even within 3-4 seconds required to execute the payment. J.P. Morgan makes clear that his piece has a stable exchange rate that XRP, like other traded coins such as Bitcoin and Ethereum, does not possess. So, is J.P.Morgan trying to kill xRapid?
It is not immediately obvious that this is his goal. First, JPMCoin will only be used – at least for starters – for payments entirely in US dollars, unlike xRapid, which allows you to manage multiple currencies and payments between currencies. & nbsp; Secondly, JPMCoin – again for starters – is only available for institutional clients of J.P. Morgan. They can use the coin to send money between them, but not to retail customers or non-customers. This is a very limited improvement in J.P. Morgan's internal payment methods.
This tends to support the argument that JPMCoin is only a hype. After all, payments between J.P. Morgan's clients are really only transfers between his own books. It seems a bit sad that the cash-strapped IT departments have to say "look, it's blockchain" persuading administrators to spend a little money on plumbing, which is always a pariah compared to the sophisticated systems of the wickets. However, from the point of view of J.P. Morgan's clients, this is simply a long-awaited improvement over the bank's extremely expensive and very clumsy cross-border payment systems. As Farooq remarks (cited in CoinTelegraph), this could be particularly beneficial for a large institutional client with subsidiaries abroad, who can currently transfer money into their organization only by using external payment channels:
Money is swinging around the world in a big company. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to transfer them to the unit? In this way, they can consolidate their money and probably get better rates.
It is quite ridiculous that J.P. Morgan's clients use SWIFT and Fedwire to transfer money within their own organizations. J.P.Morgan should have solved this problem for a long time. As the other big banks should.
Nevertheless, JPMCoin is a slap for Ripple. Brad Garlinghouse, CEO of Ripple, is saved According to him, he expects "big banks" to adopt xRapid, along with the XRP token, in 2019. Now, JP Morgan – no doubt a big bank – told Ripple that "we do not use xRapid or XRP at all. means only for internal transfers. The bank's Q & A indicates that his coin will eventually be used for payments in multiple currencies and through other blockchains. That would make it a solution for cross-currency payments to non-customers – exactly the market Ripple is targeting.
Although the piece was limited to J.P. Morgan's institutional clients, JPMCoin would continue to threaten Ripple's plans. & nbsp; According to J. Morgan Morgan, "we are pretty much all big companies like our customers, and most of the big banks around the world are too." The US dollar is used for the majority of global transactions. If JPMCoin manages to conquer the US dollar transaction market between most of the big companies and big banks of the world, what about Ripple?
Even before JPMCoin was published in the media, Ripple 's plans to recruit large banks seemed too optimistic to the point of disbelief. The big banks currently control international payments. Why would they give up this privilege to a third party, while they could develop their own blockchain-based payment network? And the need for such a network to facilitate payments between customers of different banks is not an obstacle. Banks will cooperate when it is in their interest. This is how SWIFT was born, as well as FX bank CLS and, in the UK, the LINK ATM network. It is therefore quite possible for the banks to cooperate to create their own international payment network based on a chain of blocks. Indeed, in a particularly nasty stab, the big banks could even use The innovation of Ripple.
Putting an end to Ripple's dreams of world domination, and even those of other digital coin transmitters, could be exactly what JP Morgan has in mind. It will be interesting to see how this small impbade will develop.
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On February 14th, giant bank JP Morgan announced its intention to issue its own digital "play", which will run on its Quorum internal blockchain. The coin will be indexed to a dollar 1: 1 on the US dollar, while JP Morgan will use the considerable weight of its balance sheet to guarantee the attachment, will not suffer the huge fluctuations in value that can make crypto-currencies unreliable. for payments. This is what is called in the world of crypto a "stablecoin", not a cryptocurrency – a digital token that represents a fiduciary currency.
The exact impact of "JPMCoin" on the crypto-currency landscape is not clear. Opinions are divided between those who think JPMCoin is a serious threat to Ripple and, to a lesser extent, Bitcoins and Ethereum, and those who think it's a non-event. Who is right?
The JP Morgan logo appears on an Android mobile phone. Photo Credit: LightRocket via Getty ImagesGetty
It all depends on how the room is used and who uses it. Umar Farooq, Head of Digital Treasury Services and Blockchain at J.P. Morgan, explains how J.P. Morgan's clients would use this piece:
When one customer sends money to another via the blockchain, JPM coins are transferred and exchanged instantly for an equivalent amount in US dollars, reducing typical settlement time.
This is very similar to Ripple's xRapid, which uses XRP encryption as an intermediate currency. To send money with the help of xRapid, a customer exchanges the fiduciary currency against XRP, the XRP certificate is transferred, and the recipient uses the XRP code for the fiduciary currency. Of course, the difference is that XRP is not a stablecoin. It is a negotiated instrument whose price can fluctuate considerably. In today's fast-changing currency markets, the price can change even within 3-4 seconds required to execute the payment. J.P. Morgan makes clear that his piece has a stable exchange rate that XRP, like other traded coins such as Bitcoin and Ethereum, does not possess. So, is J.P.Morgan trying to kill xRapid?
It is not immediately obvious that this is his goal. First, JPMCoin will only be used – at least for starters – for payments entirely in US dollars, unlike xRapid, which allows you to manage multiple currencies and payments between currencies. Secondly, JPMCoin – again for a start – is only available for J.P. Morgan's institutional clients. They can use the coin to send money between them, but not to retail customers or non-customers. This is a very limited improvement in J.P. Morgan's internal payment methods.
This tends to support the argument that JPMCoin is only a hype. After all, payments between J.P. Morgan's clients are really only transfers between his own books. It seems a bit sad that the cash-strapped IT departments have to say, "Look, it's a blockchain" to persuade the administrators to put money into the plumbing of the settlements, still a pariah compared to the sophisticated facade systems. However, from the point of view of J.P. Morgan's clients, this is simply a long-awaited improvement over the bank's extremely expensive and very clumsy cross-border payment systems. As Farooq remarks (cited in CoinTelegraph), this could be particularly beneficial for a large institutional client with subsidiaries abroad, who can currently transfer money into their organization only by using external payment channels:
Money is swinging around the world in a big company. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to transfer them to the unit? In this way, they can consolidate their money and probably get better rates.
It is quite ridiculous that J.P. Morgan's clients use SWIFT and Fedwire to transfer money within their own organizations. J.P.Morgan should have solved this problem for a long time. As the other big banks should.
Nevertheless, JPMCoin is a slap for Ripple. Brad Garlinghouse, CEO of Ripple, has stated publicly that he expects the "big banks" to adopt xRapid, as well as the XRP token, in 2019. Now, JP Morgan – no doubt a big one bank – told Ripple that we would never use xRapid. or XRP. And that does not just mean for internal transfers. The bank's interrogation indicates that his coin should eventually be used for payments in several currencies and through other blockchains. That would make it a solution for cross-currency payments to non-customers – exactly the market Ripple is targeting.
Although the piece was limited to J.P. Morgan's institutional clients, JPMCoin would continue to threaten Ripple's plans. According to J.P. Morgan's Farooq, "Every big company is our client and most of the big banks around the world are too." The US dollar is used for the majority of global transactions. If JPMCoin manages to conquer the US dollar transaction market between most of the big companies and big banks of the world, what about Ripple?
Even before JPMCoin was published in the media, Ripple 's plans to recruit large banks seemed too optimistic to the point of disbelief. The big banks currently control international payments. Why would they give up this privilege to a third party, while they could develop their own blockchain-based payment network? And the need for such a network to facilitate payments between customers of different banks is not an obstacle. Banks will cooperate when it is in their interest. This is how SWIFT was born, as well as FX bank CLS and, in the UK, the LINK ATM network. It is therefore quite possible for the banks to cooperate to create their own international payment network based on a chain of blocks. Indeed, in a particularly nasty stab, the big banks could even use Ripple's own innovation.
Putting an end to Ripple's dreams of world domination, and even those of other digital coin transmitters, could be exactly what JP Morgan has in mind. It will be interesting to see how this small impbade will develop.
