JPMorgan & Chase says Crypto Projects Are No Threats To Banking System, What Hope Is There For Cryptocurrencies?

Cryptocurrencies are distributed through blockchain, a decentralized ledger. Many banks across the globe have implemented the blockchain technology to provide a solution to speed, security, and scalability issues. As centralized systems, financial institutions need this technology to improve their services. Fortunately, they can accurately process more data and on time with this new technology. Despite using the decentralized solutions to improve their services, a competition exists between banks and cryptocurrencies. The digital currencies are not currently used as a substitute for cash but they are becoming popular in the financial sector. However, many bankers frown at projects that encourage the use of cryptocurrencies.

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Jamie Dimon, the CEO of JPMorgan Chase, stated that crypto projects presently pose no threats to JPMorgan main business activities. On June 27, in an interview with Yahoo Finance, he explained the possible effects of cryptocurrencies on the present banking system. Dimon said that the bank’s core business presents a healthy competition to crypto. Consequently, crypto is not likely a threat to the bank.

According to Dimon, the bank makes a daily transaction of $6 trillion. The transaction which involves the movement of money around the world is always secure. Dimon pointed out that the banking system has built networks for real-time payments. With TCH, Zelle, and real-time p2p, the bank can perform secure and seamless transactions. Besides, the transaction process is cheap. The business deals are conducted in compliance with the anti-money laundering regulations and Know Your Customer (KYC).

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However, he mentioned that some firms want to deprive them of their expected returns. The bank has consistently developed new services for its customers in order to stay ahead of the competition. Some of these offers include robo investing and free trading. These services help to attract new customers and keep the existing ones.

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Banks need to be up-to-date to stay ahead of the competition. JPMorgan plans to develop its cryptocurrency to keep up with technological advancement. Reportedly, the JPM coin will be available by the end of the year, 2019. The head of JPMorgan’s digital treasury services and blockchain, Umar Farooq, spoke on the potentials of the bank’s stablecoin. He disclosed that the JPM coin can be used to deliver bonds through blockchain.

The chief executive of Goldman Sachs, David Solomon, also talked about the future of financial institutions and digital currency. According to Smartereum’s earlier reports, Solomon remarked that stablecoins may become a medium for global payment systems. However, such a move will be possible if major banks across the globe consider the benefits of seamless payments, tokenization, and stablecoins.

Also, he suggested that Facebook and other tech giants should partner with banks with regards to the development of stablecoins. Such partnerships will help tech companies to avoid regulatory restrictions faced by banks. Consequently, they can conduct frictionless payments without becoming financial institutions.

Cryptocurrencies may disrupt payment processing and even other services offered by financial institutions. Though digital currencies do not currently fulfill the entire features of a monetary asset, banks need to stay ahead of the competition. They can modify their products to match those offered by tech firms and other competitors.

What do you think about the cryptocurrency news today?


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