JP Morgan Launches Pale Imitation of the “Fraud” that is Bitcoin
Multinational investment bank JP Morgan has announced that it will launch its own cryptocurrency of sorts. The so-called JPM Coin will bring some of the benefits of Bitcoin to some of the users of the bank
JPM Coin will be built on a private blockchain, be backed by fiat currency, and be exclusive to JP Morgan’s institutional clients. In short, it represents few if any of the truly liberating qualities of Bitcoin.
Your Cryptocurrency is a Fraud, Ours is Fine
It is less than two years since JP Morgan exec Jamie Dimon had his famous outburst against Bitcoin. The CEO of the multinational investment bank called the world’s most popular digital asset a “fraud” back in September of 2017. Yet behind the scenes, the firm he represents has clearly been working on ways to strip the liberating qualities from Bitcoin and present only the features it agrees with to the world.
The announcement of the JPM Coin prototype today is the first of its kind on the planet. No other bank has launched its own digital asset. However, the news should not be taken as the bank’s endorsement of cryptocurrency. It seems more likely that this is an attempt by an institution that feels deeply threatened by true, decentralised digital assets to stay relevant.
In an interview about the launch of JPM Coin, Umar Farooq, the bank’s head of Digital Treasury and Blockchain, stated the following of the new project:
“JPM Coin is a digital coin designed to make instantaneous payments using blockchain technology. Exchanging value, such as money, between different parties over a blockchain requires a digital currency, so we created the JPM Coin.”
The JPM Coin is, of course, backed by the dollar. This means that its value remains behest to the whims of the Federal Reserve. If the Fed wants to print some new greenbacks, you had better believe that the value of your JPM Coins is going down, along with that of every physically held or digital stored dollar on the planet.
Oh, wait. Did I say “your” JPM Coins? My mistake. What I meant to say was the JPM Coins of whoever the institution deems worthy enough to use the new digital currency. After all, it will only be “institutional investors” who are given the freedom to use the digital representation of dollars being pedalled as an innovation.
You can almost hear the boardroom meeting now:
“This Bitcoin thing is interesting. What can we steal from it? Permissionless? No, let’s make sure we call the shots. Completely uncorrelated to any other asset or currency? No, fractional reserve banking is working out just fine for us. Peg it to the dollar. I like this part about it being fast though. Let’s keep that. In fact, let’s make it faster by being more under our own control. Nice. Lunch time?”
Could JPM Coin Render XRP Useless?
Basically, with its permissioned design and sole use case being to facilitate payments between institutional clients and banks, the JPM Coin could indeed pose a threat to some corners of the disparate cryptocurrency space. As is highlighted by long-time Bitcoin proponent @WhalePanda in this Tweet:
If you listen very carefully you will hear all Ripple holders now scream in agony.
Congrats @jpmorgan on creating a useless shitcoin.https://t.co/frM3POunQ1
— WhalePanda (@WhalePanda) February 14, 2019
With similar stated utility, the JPM Coin is essentially pursuing exactly the market that the Ripple company is going after with its line of products, including the XRP token. With such a large and established name providing essentially the same functionality as XRP, it seems much more likely that the banks of the world will favour JPM Coin over Ripple’s services. Could this mean that the much-debated asset’s days are numbered?
Meanwhile, Bitcoin remains free from real competition with regards its most important qualities. JPM Coin will not provide the unbanked people of the world an easy entry into the global economy, nor does it allow individuals an escape from the poor decisions of those in control of the central banks in their nations. All told, the idea seems likely to widen the gap between those who can access the most elite banking services and the planet and those that are forced to go without. Such innovation…
Anyway, here is Andreas Antonopoulos to remind you all what makes truly public blockchains great:
Related Reading: JP Morgan Chase: Cryptocurrency a Threat to its Own Services
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