Just a few weeks ago, JP Morgan Chase, one of the largest financial institutions in the world, shocked the cryptographic space. For those who missed the memo, the Wall Street pillar revealed plans to launch their own digital asset, based on the private accounting book Ethereum-Esque Quorum.
Due to its premise, JPM Coin, as it has been nicknamed the cryptocurrency, was considered a competitor of the offers that SWIFT and Ripple continually promote. But, Binance has openly stated that this might not be the case.
But first, here is a detail about JP Morgan’s first focused cryptographic product.
Meet JPM Coin
According to the comments of Umar Farooq, the leader of the blockchain division of the Wall Street bank, the novel asset will be backed by physical dollars of the United States and will act in a very similar way to the stable funds, but in a rather centralized manner.
Eventually, the asset could extend its tentacles to various accounting books both private and public with interoperability protocols that allow JPM Coin to be used in a variety of different ecosystems. Farooq said his team wants the company to eventually become a multipurpose asset for the bank’s operations, while will use the digital asset.
For now, however, the JP Morgan executive made it clear that the new company is primarily aimed at strengthening the company’s internal international corporate transactions.
Farooq added that a small fraction of his employer’s daily corporate transactions, supposedly equivalent to a nominal value of $ 6 trillion, would be made through JPM Coin. However, he did not explain to what the fraction would be equivalent. But as it stands, it is unlikely that the bank will be prepared to make multi-billion dollar transactions in its nascent centralized block chain.
Interestingly, Jamie Dimon, the CEO and CEO of JP Morgan at Bitcoin, pointed out that the cryptocurrency of his company could eventually be seen at points of sale.
Is not Bank Crypto a threat to XRP?
While this project may have a harmless premise, many cryptographic commentators rushed to Twitter to comment that Ripple’s services and the XRP’s general ledger function could be attacked.
Tom Shaughnessy, the principal analyst at Delphi Digital, commented that JPM Coin is a big slap in the face for Ripple, explaining that cross-border payments from the fintech group and remittance efforts can go awry.
However, a report by the world-renowned company Binance states that it does not cut or dry. In an in-depth study on the so-called ‘corporatecoin’ and what it could mean for cryptocurrencies in general, the research division of the company registered in Malta pointed out that while JPM Coin has a network and a decent value proposition, the asset Currently, it is restricted for internal clients. Binance also added that it is “highly unlikely” that customers of competing institutions, such as Citi, actively use JPM Coin.
On the other hand, the Ripple technologies created on the XRP ledger could theoretically be adopted by any institution, since the startup fintech does not present conflicts of interest or the always competitive attitude of Wall Street.
Binance Research even notes that Quorum, which can only process dozens to hundreds of transactions per second, is comparatively inefficient when placed next to XRP and supposedly from the SWIFT event. After further mention of JP Morgan and Ripple’s rationale, Binance concluded:
“In general, the two projects seem to have different approaches and possible applications. Short term. While there is currently no direct overlap in the functionality of the two initiatives, future developments on the scope of JPM Coin outside its existing closed network will determine to what degree Ripple and JPM Coin will compete.”