Jamie Dimon, the CEO at JPMorgan Chase suggested that company’s new cryptocurrency JPM Coin (the megabank’s planned U.S. dollar-backed token) could eventually be a consumer product. CNBC reported this news on Tuesday, Feb 26th. According to that report, Dimon said at JPMorgan’s annual investor day:
“JPMorgan Coin could be internal, could be commercial; it could one day be a consumer.” He meant that the coin would find its use for retail payments.
JPMorgan Chase is a banking giant based in United States which announced its plan to launch its own cryptocurrency in a U.S. banking first on Feb. 14 in order to increase settlement efficiency within three of its operations. It will focus on international settlements by major corporations and help to speed up the transactions which are taking a day or longer currently, by making use of extant options such as SWIFT.
After the announcement, JPM Coin has secured its advocates and found its opponents as well in the cryptocurrency community. Bill Barhydt, the CEO of cryptocurrency wallet and investing app Abra suggested that JPMorgan Chase has fabricated its new initiative and stated that it is more likely “a ledger meant for settling trades” than a coin.
He further added:
“if it really is a private blockchain and private coin, I’m guessing it’s a complete waste of time.”
Umar Farooq, the blockchain lead at JPMorgan described three applications all internal: replace wire transfers for international payments by large corporate clients; impart instant settlement for securities issuances, and replace U.S. dollars held by subsidiaries of major corporations which are using treasury services of JPMorgan.
JPMorgan released an FAQ which noted that while JPM Coin will run on the Quorum (the proprietary blockchain of the bank), it “will be operable on all standard Blockchain networks.” Brad Garlinghouse, CEO at Ripple noted that JPM Coin “misses the point” of cryptocurrency.
He responded on Twitter that:
“as predicted, banks are changing their tune on crypto. But this JPM project misses the point — introducing a closed network today is like launching AOL after Netscape’s IPO. Two years later, and bank coins still aren’t the answer.”
Alexis Ohanian, the co-founder of Reddit, argued that the recent move by JPMorgan hints that there is real innovation going on because speculators have left the sector. In contrast, he also said that the Coin could be a good thing.