Cryptocurrency News: JPM Coin Joins the Fray
The buzz around cryptocurrency news is intensifying by the day as more people and businesses continue to invest in this asset category. And now there’s a new kid on the block – JPM coin, which was announced by JPMorgan in February. While JPM coin has elicited some excitement in the business space, the main question remains, “how is JPM coin different from mainstream cryptocurrencies?” First, the JPM coin operates privately and is used for private money transfers between clients and lenders. As such, it doesn’t operate in a public network as Bitcoin and Ethereum do.
In this post, we review the JPM coin. Read on to learn more.
Latest in Cryptocurrency News: JPM Coin
JPM Coin is a dollar-backed digital token from JP Morgan Chase, one of the major banks in the US. The blockchain technology is designed to facilitate the instantaneous transfer of payments between some of the bank’s clients. Unlike other cryptocurrencies such as Bitcoin, this coin is redeemable for fiat currency held by JP Morgan in the ratio 1:1. While the JPM Coin is not money per se, it can be used to complete payments in an efficient manner. Cryptocurrency news reports that the coin is of equal value to one US dollar, with plans to use it for additional currencies in the future.
How It Works
The JPM Coin works in a quite straightforward way. At the moment, the coin will run on the bank’s permissioned blockchain. However, there are plans to make the coin operable on all standard platforms. As a client, you will make a USD deposit and receive an equivalent amount in JPM Coins. These coins represent your deposit in the blockchain. This means that you can transfer the coins via blockchain and the recipient can then redeem the coins for US dollars. JPM Coin is not sold on any market and cannot be exchanged freely by holders. As an individual, you cannot acquire the coin since it is designed for institutional clients and business-to-business transactions. During these early stages, there are no plans for using it for individual clients.
Is JPM Coin a Cryptocurrency?
Although cryptocurrency news introduces JPM Coin as a cryptocurrency or stable coin, the bank has refrained from using these terms. This means that the coin is neither a cryptocurrency nor a stable coin. The digital token represents dollars during payments but cannot be bought or sold for dollars.
JPM Coin vs. Cryptocurrency
It is already clear that JPM Coin is not a cryptocurrency. This shows that the coins are significantly different from cryptocurrencies like Bitcoin. JPM Coin is centralized and governed by JPMorgan Chase and is regulated globally. On the other hand, cryptocurrencies strive to have a high degree of decentralization.
While most cryptocurrencies run on public networks, JPM Coin will run on Quorum, a private network. Generally, cryptocurrencies are a medium for exchange for goods and services and can be used to invest. This is different from JPM Coin, which does not resemble cash in the same way and can only be used for transfers and payments for institutional clients.
The Benefits of JPM Coin
JPM coin is likely to have a significant impact on institutional clients as well as their end customers. It is expected that the coin will increase the system’s efficiency and reduce costs, translating to savings for end customers. The new system will also replace the outdated wire transfer system, ensuring that international payments are settled in real-time. Lastly, through JPM coins, payments will be made instantaneously, eliminating waiting time.
As it currently stands, JPM Coin is designed for use in facilitating payments between institutional clients of the bank only. In the future, the bank intends to expand the program so that it includes other currencies as well as covers individual customers as well. While the bank’s CEO had strong remarks against Bitcoin in the past, there is every indication that JPM Coin may help to usher in a new age of digital currency transaction settlement in the financial world. Going forward, JPMorgan Chase is expected to combine blockchain and cloud computing to ensure coherent services.
Optimism and Criticism
The introduction of the digital token has created a lot of buzz around JPM Coin. Cryptocurrency news reveals that players in the crypto community and in traditional finance are divided on what the impact of JPM Coin will be. While some people have suggested that the digital coin will kill the Bitcoin dream, others argue that JPM Coin is not a cryptocurrency and have remained mostly skeptical.
The announcement by JPMorgan Chase has created quite a stir within the cryptocurrency news. Some crypto enthusiasts believe that such a move by a significant financial institution will help increase trust and encourage mass adoption, while others see it as an effort to ride on the name of cryptocurrency to achieve specific objectives. However, with enterprise blockchains becoming increasingly common, there is a real likelihood that we will witness a wave of new enterprise coins inspired by this move.