As reported before, JP Morgan Chase’s CEO Jamie Dimon announced in February that JPM was developing a cryptocurrency JPM Coin which it would use to facilitate cross-border payments. JP Morgan Chase made a U-turn from the anti-cryptocurrency stance with this announcement.
The move was in a sense stepping into the territory of Ripple, who over the years has developed products for international payments between financial institutions. As such, JPM coin has attracted criticism from Ripple supporters and sections of the cryptocurrency community.
Brad Garlinghouse, the CEO of blockchain Payment firm Ripple has challenged the rationale behind the cryptocurrency launched by JP Morgan, noting that it will fragment the global financial ecosystem.
While speaking during an interview at the Annual DC Blockchain Summit ongoing in Washington D.C. on March 6, Garlinghouse took a swipe at JPM Coin noting that the coin which will most likely be used only by the bank will only fragment the financial ecosystem.
“This guy from Morgan Stanley was interviewing me last week, and I asked him, so is Morgan Stanley going to use the JPM Coin? Probably not. Will Citi use it? […] Will PNC? And the answer is no. So we’re going to have all these different coins, and we’re back to where we are: there’s a lack of interoperability.”
Blockchain experts agree that there need interoperability and interaction between blockchain systems for its solutions to solve real problems on a global scale. Garlinghouse doesn’t think JPM Coin is designed to achieve that.
Furthermore, the Ripple boss questioned the relevance of the JPM Coin which unlike the XRP is a stablecoin pegged to the price of the dollar and maintained by the bank’s dollar reserve.
“[JPM] announced the JPM Coin for institutional customers. If you give them a dollar as deposit, they’ll give you a JPM Coin that you then can move in the JPM ledger. Wait a minute, just use the dollar! I really don’t understand […] what problem that solves.”
He admitted, however, that the bank’s entry into the cryptocurrency have brought more positivity into the space that is looking forward to more institutional players to get in. Following the JPM Coin announcement in February, the price of top cryptocurrencies soared for a moment. “That’s the one good thing I’ll say about this,” Garlinghouse said, “for the blockchain and crypto industry to have players such as JPM leaning in.”
As Smartereum reported, blockchain-focused venture capitalist Tim Drapper supports this notion that JPM Coin brings gains to the crypto space and bitcoin in particular.
Many Bitcoin Knock Offs Failed But All Add Interest to BTC in the Long Run
Referring to JPM Coin as a bitcoin competition, he said “Many Bitcoin knock offs have failed but they all add interest to BTC in the long run.”
“This move will lead to the biggest change in the world’s history and it is exciting. I thought the advent of the internet was exciting. But this news will change everything completely. The government itself will change.”
Binance research team have argued that JPM Coin is not in direct competition with the XRP noting that it will allow the bank to improve the efficiency of its services.
Garlinghouse has attacked the JPM coin in the past. One time he said that JP Morgan Coin misses the point of a cryptocurrency and likened its launch to the like launching AOL after Netscape’s IPO.
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Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.