Just a few weeks after JP Morgan declared cryptocurrencies like Bitcoin to only have value in a post-capitalist dystopia, the $2.5tn banking giant announced its own blockchain-based “JPM Coin” – should we be worried?
While many cryptocurrency enthusiasts are both pained and confused to see the words “blockchain” and “corporate-payments” used in a sentence together, JP Morgan’s unexpected move may be a sign of big finance taking a major step into the digital asset market.
American financial terrorist Jamie Dimon launches a competitor to Venezuela’s ‘Petro’.
— Max Keiser, tweet poet. (@maxkeiser) February 14, 2019
Just a couple years ago, JP Morgan CEO Jamie Dimon declared that he “didn’t give a sh*t” about anonymous decentralized currency system bitcoin and denounced it as a “fraud.” Putting people’s money where his mouth is, his company even banned customers from purchasing bitcoin using the bank’s credit cards.
All the same, the possibility of instantaneously settling payments between bank clients without relying on wire-transfers proved too promising to pass up, and the bank announced Thursday it had already successfully tested its own “payment leg” for blockchain transactions.
Blockchain technology developed as an anonymous decentralized ledger to help keep transactions secure and stable after the 2008 financial crisis. The fact that the technology was not tied to any government or large corporate entity was one of the biggest selling points in a period which saw a massive drop in public trust for such institutions. Some even felt cryptocurrencies could play a role in putting banks like JP Morgan out of business for good.
Now, however, JP Morgan thinks it can use the same technology to make itself and its clients even more money, even without the context of a major crisis. Of course, by “clients” they mean only large corporate accounts which will be the only ones with access to the payment method as a part of the bank’s efforts to keep the currency stable. The JPM Coin will also be tied to the dollar, trading at a 1 to 1 ratio. Unlike bitcoin, JPM Coins only exist to secure a transaction on the blockchain and are then instantly redeemed for dollars and destroyed.
Despite being an unprecedented step in an industry that has traditionally seen digital assets as too much of a risk, JPM Coin is not exactly a “cryptocurrency” in the fullest sense. It is essentially a glorified liquidity tool, and even in that regard, it will only handle a small fraction of the lender’s wholesale payments business on exclusively international trades.
Nonetheless, some Crypto-enthusiasts on Twitter have already begun to gear up for a fight, not happy with a big bank making its presence felt in the marketplace.
JP Morgan is creating their own “cryptocurrency” called JPM Coin.
They will be the first US bank to use a digital token to settle transactions between clients.
At first they ignore you,
then they laugh at you,
then they fight you, <—-
then they just buy bitcoin.
— Alec Ziupsnys (@AlecZiupsnys) February 14, 2019
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