JPMorgan is Creating Its Own Cryptocurrency

JPMorgan is Creating Its Own Cryptocurrency

What makes today's news so surprising is that this is the same bank whose Chairman and CEO Jamie Dimon has up to now been very critical of cryptocurrencies, especially Bitcoin.

A banking giant with nearly $6trillion worldwide every day has announced the launch of its own cryptocurrency called, JPM Coin. In other words, you shouldn't expect to see JPM Coin listed on your local cryptocurrency exchange.

Their blockchain technology quickly transfers payments with a clear record of the transactions.

Speaking to CNBC, the bank's head of Digital Treasury Services, Umar Farooq, explained that the bank is preparing itself for a blockchain-powered future.

This is a major breakthrough in the future of cryptocurrency, which has so far been mostly shunned by the global banking industry who saw it as a risk not worth taking, while its price rate plummeted throughout past year. JPM Coin will settle in real time, 24 hours a day. This is the first token in the ecosystem to be supported and issued by a USA bank.

"The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this", he said in an interview February 14.

Farooq also revealed that it could serve as a sort of "stablecoin" for clients holding USA dollars in global jurisdictions. But the latter seem to recognize the potential of blockchain technology and digital tokens.

The final use will be for securities transactions.

The bank said that using the coin allows for the "instantaneous transfer of payments between institutional accounts".

"When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalents amount of USA dollars, reducing the typical settlement time", the company added. These now rely on wire transfers and use decades-old networks like Swift which have cut-off times for transactions in different countries.

Replacement for dollars held in treasuries - The token could replace dollars held by subsidiaries of huge corporations across the world.

So how does the JPM Coin differ from bitcoin? JP Morgan caters to some of the biggest companies globally, handling such operations as salary settlements and supplier payments.

"Money sloshes back and forth all over the world in a large enterprise".

J.P Morgan is betting that its first-mover status and large market share in corporate payments - it banks 80 percent of the companies in the Fortune 500 - will give its technology a good chance of getting adopted, even if other banks create their own coins. Farooq continued that: "Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? JPM Coin will be operable on all standard Blockchain networks", the FAQ says. That way, they can consolidate their money and probably get better rates for it."Pretty much every big corporation is our client, and most of the major banks in the world are, too", he concluded".

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