A banking giant with almost $6trillion worldwide every day has announced the launch of its own cryptocurrency called, JPM Coin. Accordingly, JPMorgan’s new coin will go live in the next few months.
World’s First Cryptocurrency By Bank
Announced on Feb 14, 2019, JPM Coin’s headline surprised many crypto enthusiasts – since, in last few years, the name of JPMorgan’s Jamie Dimon appears on headline while criticizing the largest cryptocurrency, bitcoin. In fact, CEO Jamie Dimon called Bitcoin as a ‘fraud’. However, few Engineers at Bank have rolled a new coin on Bank’s name which intends to transfer the minimum payment in initial.
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. The new coin by Bank’s engineers is an initiative to execute instant payment settlement between banks using cryptocurrency mechanism. Talking about the payment transfer using blockchain, Umar Farooq, the banks’ blockchain projects says that ‘it would be payment leg for that transaction’.
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,” Umar Farooq said. “The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this.”
Bashed Bitcoin But Not Regulated Crypto
It’s quite interesting to note that Jamie and bank’s few engineers ‘bashed bitcoin’ but they constantly eye on digital currency that is ‘regulated’. Consequently, they believe such regulated cryptocurrency will hold the promise. At this point of time, JPM Coin is more likely a stable coin. The reports revealed that the coin will be backed by 1 U.S.dollar wherein the value wouldn’t fluctuate.
The idea is that, once the dollar is deposited in banks, clients will issue the coins and such coins will be used either as payment or security purchase on the blockchain. As such, once after the clients used it, the bank would destroy the coins and return ‘commensurate number of dollars’ to clients.
Per Farooq’s statement, JPM coin will be on board for three key reasons. First is for international payments for large corporate clients, second is for securities transactions and lastly for huge corporations using bank’s treasury services business.
Addressing the JPM coin for treasury service firms which replace their dollars in subsidiaries worldwide, Farooq said that;
“Money sloshes back and forth all over the world in a large enterprise,” he said. “Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it.”
Isn’t it surprising that JPMorgan is the first banking player to launch cryptocurrency? share your opinion with us.
Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com