Recently JP Morgan Chase announced that they would be rolling out their own cryptocurrency, JPM Coin to storm the market. While Jaime Dimon, JP Morgan Chase CEO, has railed against cryptocurrency in the past, he said that there was great potential in blockchain. While JP Morgan has released their JPM coin, it’s been an undeniable flop in the cryptocurrency market. Mostly because it isn’t cryptocurrency.
Cryptocurrency, like bitcoin, is a digital asset designed to work as a medium of exchange to encrypt transfers and secure them and meant to operate independently of a bank. By forgoing the bank, transfers of cryptocurrency avoid the fees usually placed on them by these institutions. In essence, it can function as secure, digital money that in and of itself can gain value based on the market. The current rate for Bitcoin at the time of writing this article (since it changes consistently) is $3611.98 to 1 BTC.
What Is JPM Coin?
The JP Morgan “cryptocurrency” is a direct, one-to-one for digital coins that represent the money that you have located within your Morgan Chase account. This is just a digital representation of basic banking and offers nothing else beyond that. JP Morgan Chase is optimizing it’s digital system and proclaiming it to be cryptocurrency.
Jerry Brito, the executive director at Coin Center, is adamant that the JPM isn’t in fact, cryptocurrency, that using the term is a misnomer. “It’s not a cryptocurrency. A cryptocurrency is one that is open and permissionless, if you want to download it, you don’t need permission; you just need some software.”
While it seems that JP Morgan did explain that it wasn’t considered a cryptocurrency on their website, it’s still been swept up in the fuss. JPM is more of a stablecoin and will probably be spread to other banking systems in the future.
One of the most significant known applications for JPM will be along the lines of using instant settlements. It can eliminate the need for large wire transfers, which can sometimes take result in substantial time gaps between settling and being able to use the money upon the agreement. Instead, with the JPM, the money accrued from international settlements can be used across the globe in a matter of minutes. This can help to streamline the services provided by banks and to help secure the internal transfer of money.
There are many critics out there who claim that there’s the fear that JPM can be used for fraudulent purposes, with the companies past and the ability for the coins to be used internally for business-to-business settlements. Most of this criticism stems from the arch-enemy of Dimon, the entire cryptocurrency market.