The largest banking player in the United States, JPMorgan, announced the development of their digital currency. The goal is to eliminate the time needed to process transactions. The so-called “JPM Coin” will rely on the blockchain, giving the coin security and transparency.
Todd Horwitz, the chief strategist at Bubba Trading, said in an interview with CNBC that JPMorgan is on the way to revolutionize the way banks transfer money in cross-border payments. “China and Russia have been exchanging gold for oil on the blockchain for years. There is no real reason not to use blockchain. JPMorgan is going to kill the federal reserve while making global payments within seconds. Small countries are using cryptocurrencies daily. Yes, there will be some problems, but remember the Internet in the 90’s – we are now in the digital age”, Horwitz added.
Umar Farooq, head of treasury and blockchain at JPMorgan’s stated that clients want more and more to be able to move large amounts of money fast and secure and blockchain technology is giving them just that. Farooq also mentioned that although the news about JPMorgan releasing a cryptocurrency is old, the development process is almost complete and the initial test with few institutional clients are beginning.
At the moment JPMorgan is transferring around $5 trillion per day, so there is a need for a faster and more efficient way to migrate funds. For now, the JPM Coin will be available only for its clients, but skeptics are doubtful about the bank’s involvement in cryptocurrencies. Some experts even accused JPMorgan of giving legitimacy to the suffering from high volatility crypto sector.
And while SWIFT are doing their best to increase the efficiency of cross-border payments, Farooq is confident that there is still a massive problem with real-time money transfers and JPM Coin could be a panacea for such problems.
JPM Coin will put a lot of pressure for Ripple, which is the most preferred blockchain solution for banks and big institutional players. Ripple (XRP) has been the most preferred cryptocurrency payment method for large players, with $12,6 billion in market capitalization. Tom Shaughnessy, Delphi Digital principal, stated that JPM Coin is a direct opponent for Ripple.