Is Jamie Dimon going to have to eat his words?
Big news from the financial world today as J.P. Morgan picks Valentine’s Day to announce that the U.S. banking conglomerate is launching its very own cryptocurrency called the “JPM coin.”
The company says they are using this new coin to increase efficiency and help expedite international transactions. In the past, those who wanted to move money overseas had to use the SWIFT bank system that routinely takes over a day for verification.
This Valentine’s day, William Suberg at Cointelegraph reports JPM coin will also be used for various kinds of treasury and securities transactions.
According to Suberg’s story, Umar Farooq, JPM’s Blockchain Focus leader, elaborated to CNBC recently:
“Anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,” Farooq said.
Last year, Dimon was running around calling cryptocurrencies a “fraud” and a “scam” – but after walking back this comments at the World Economic Forum, it’s clear that his mentality has changed to some extent.
This new J.P. Morgan coin is big news for cryptocurrency investors because J.P. Morgan’s JPM coin represents the first major banking cryptocurrency of its kind.
This is exactly the type of institutional buy-in that many investors have been looking for – also, with Bitcoin so mired in low value, this constitutes an enticing entry point for many investors who wouldn’t want to pay $6000 or $10,000 for a single Bitcoin. Right now, the value of a single Bitcoin is hovering around just over $3500 which is much more in range for investors who may only have cash for the value of, say, a used 2009 Ford Focus.
That’s not to say that smaller investors can’t get involved – with today’s network of cryptocurrency ATMs you can actually purchase small bits of Bitcoin at many financial merchandising locations around the country.
Although JPM coin is brand new, some are already speculating on its long-term effects, comparing it to other pre-existing crypto options.
“Starting its own cryptocurrency, JPMorgan Chase is taking an idea made popular by Ripple — that cross-border payments can be handled faster and more cheaply if they’re conducted as crypto transactions rather than as messages between correspondent banks sent via Swift — and running with it,” writes Penny Crosman at American Banker. “But instead of requiring banks to use Ripple’s controversial and volatile XRP currency, JPMorgan Chase’s system will use its own so-called stablecoin — a digital token that will always be worth one U.S. dollar — backed by the bank.”
Keep an eye on JPM coin to see if it can “unseat” Ripple – and to see it as an omen for how American banks are going to treat cryptocurrency this year and beyond.