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XRP-Although investors in cryptocurrency are surfing the green wave that is spreading in the market and that the BTC exceeds the US $ 4,000 to set a new valuation record in 2019, a debate begins to form on the exact nature of the JPM piece.
JP Morgan Chase, who has been described as a cryptocurrency opponent considering what CEO Jamie Dimon said, surprised the financial world with the JPM Coin announcement. Exact details on the coin are yet to come, but two things are clear: the currency will function as a stable currency indexed to the value of a US dollar and the features will be extremely similar to those of Ripple and xRapid service using the protocol. XRP.
Ripple, the blockchain-based start-up behind XRP, has been at the heart of the cryptocurrency / finance technology merger by pushing its xRapid protocol and payment protocol for cross-border transactions. By using the XRP for cash, the company offers advantages to banks and customers who want to send money around the world, which represents a substantial improvement in speed and cost compared to industry standards. .
However, with the ad JPM Coin – who will serve as Ripple's intermediary for JP Morgan clients – some analysts question whether the decision is a direct challenge for XRP. According to a series of articles published on Forbes, the latter becomes less likely.
As Forbes said, JPM Coin constitutes less cryptocurrency (in the traditional sense of the term) as a tool or digital asset that will be used in very specific conditions. Stablecoin labeling refers only to the attachment of the value of the coin to a stable dollar in price. In reality, the intrinsic value of a single JPM coin does not matter because the motto – at least according to what we know so far. – is not meant to be a trade, bought or sold on a free market.
Therefore, the JPM piece is not really a "cryptocurrency" or a stable currency, and will offer few competitive opportunities for the XRP. However, this offers direct competition to Ripple and the company's payment platform, which could exert indirect pressure on XRP.
On the one hand, Ripple and JPM Coin are tackling the same problem: inefficient, slow and costly cross-border transactions that are becoming increasingly archaic in the modern digital landscape. Instead of adopting the Ripple protocol, JP Morgan's announcement makes it clear that the bank has chosen to use a bank to solve the problem of increasingly global transactions. Although JP Morgan's decision does not immediately mean that all banks and financial institutions will follow, eliminating the Ripple market, it shows that it is possible.
XRP enters the equation by two indirect relations with Ripple. For starters, the currency is used directly for liquidity in the xRapid service, which means that the adoption and use of xRapid favor the use of XRP. In addition, the coin is still tied to Ripple's fortune, at least because of investor sentiment. Ripple did a commendable job of withdrawing from the XRP framework, thus promoting decentralization and making the third largest cryptocurrency more true to the industry's values.
However, it is hard not to imagine a certain overlap between the fortunes of XRP and Ripple, at least for the foreseeable future. If Ripple fails globally, this could have consequences for the valuation of XRP and the security of its investment base. But, while JP Morgan could show a change on Wall Street, Ripple has not yet exploited all its potential customers. The company has legitimately targeted developing countries and unbanked populations, such as India and Brazil, among the regions that have the most to gain from their payment protocol.
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