JP Morgan Chase, one of United States major banks has in a shocking move created its own cryptocurrency, a first by a U.S. based bank.
CNBC reported on Thursday that the New York-based bank has taken up the initiative to launch its own digital token, aimed at facilitating instantaneous transactions among the bank’s customers; with the JPM Coin taking the form of a stablecoin.
According to Umar Farooq, Head of Blockchain Projects at JP Morgan, he states;
A tiny fraction of the bank’s $6 trillion in daily transactions will be conducted by its newly created ‘JPM Coin’ to settle international payments at any time of the day and within seconds.
The bank also went on to state that the token will be used for securities transactions, corporations using the bank’s treasury services and further out for payments on internet connected devices, if the blockchain use-case for it shows up.
Detailing its utility, each JPM Coin is said to be redeemable equivalent to a single U.S. dollar hence; clients and customers will be issued the coins after making USD deposits at the bank and after using the digital coins for payment or purchases on the blockchain, the bank destroys the coins and gives clients back an equal amount of U.S. dollars.
The trial of the coin project will kick start in a few months when the coin will go live for real-use application in banking; the JPM token will be issued on Quorum prior to subsequent extension to other platforms and operations on all standard blockchain networks. Also, first implementation users will be clients of JP Morgan’s wholesale payments business.
JP Morgan also went on to clear the air over its initial denial of the project in January; Blockchain head Christine Moy explaned “it wasn’t up for announcement at the time of your inquiry.”
The Turn Around
Jamie Dimon CEO of JP Morgan had previously been noted to maintain a pessimistic stance against Bitcoin and cryptocurrencies. The CEO had at various times notably in 2017 called the digital currency ‘a fraud’ while also going ahead to ban its customers from buying cryptocurrencies through the bank’s credit card. However, following a retraction of his statements in 2018 and with this latest move, signs are rife that the bank is beginning to see the potential in crypto assets.
Mixed reactions have trailed this announcement; while there is no denial of the massive adoption implications of the JPM coin, hardcore crypto enthusiasts express disapproval over the recent moves by some banks to graft in on the space, this they believe may disrupt the decentralization core on which cryptocurrencies where founded. Extensively, some query the motive of the JPM coin to compete against Bitcoin (BTC) or directly challenge the budding Ripple (XRP) token payments platform; these opinions are yet to be entirely confirmed.
What are your thoughts on the JPM coin and the movement of traditional financial institutions into the crypto space? Share in the comments.
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