Crypto-proponents were abuzz when the investment bank JP Morgan came out with the JPM Coin, a US dollar-backed cryptocurrency that would be used for cross-border transactions with the bank’s client. However, they lamented its use as an internal-payment tool within JP Morgan. A recent statement by the bank’s CEO Jamie Dimon suggested that JPM Coin could one day be used outside the bank.
During an annual investor day at JP Morgan, Dimon was asked if the dollar-backed cryptocurrency could one day be used for retail payments. In response to the inquiry, he said:
“JP Morgan Coin could be internal, could be commercial, it could one day be consumer.”
The JP Morgan website, however, suggested that the coin will stick to the original blueprint of being an internal payment tool for the clients of JP Morgan rather than a cryptocurrency used for commercial transactions in the retail network.
Based on conflicting information from the bank and the bank’s CEO, it could be inferred that Dimon’s comments were speculative, but the cryptocurrency community was certainly buoyed by the announcement.
This stark turn-around from Dimon is quite remarkable given the numerous times the JP Morgan CEO has bashed Bitcoin and the cryptocurrency industry in the past. He previously called the top cryptocurrency a “scam”, adding that he had “no interest” in the digital asset.
Furthermore, Dimon had even appealed for regulatory action against cryptocurrencies, deeming them an uncontrollable asset. Blockchain technology, however, has earned his praise. He branded the technology that powers cryptocurrency “real,” while continuing his anti-Bitcoin stance.
Announced on February 15, the JPM Coin took the cryptocurrency market by storm, with some speculation suggesting that the February 18 market cap increase of over $10 billion was due to the positive effect of the JP Morgan announcement.
Many influencers voiced their disapproval and opposition to the JP Coin, suggesting that it is antithetical to the principle of cryptocurrencies. Ripple’s CEO Brad Garlinghouse suggested that JPM Coin “misses the point”. He referenced his 2016 article, appropriately titled “The Case Against Bank Coin” where he argued that if the virtual currency is backed by fiat, it is no longer an asset, it’s a liability.
Craig Wright, the chief scientist at nChain, who is pushing the stance that he is the real Satoshi Nakamoto, called out the JPM Coin, claiming that he held the patent to what the bank wants to do with their cryptocurrency.
Nouriel Roubini, better known in the cryptocurrency community as Dr Doom for his vicious attacks on Bitcoin, suggested that calling the JPM Coin a cryptocurrency “was a joke.” He further added that the coin was a “pseudo crypto coin,” comparing the bank’s coin to the “centralized” altcoin XRP.
“In which way has the new alleged JP Morgan crypto coin anything to do with blockchain/crypto? It is private not public, permissioned not permissionless, based on trusted authorities verifying transaction not trustless, centralized not decentralized.”
However, with Jamie Dimon hinting that JPM Coin could be expanded to encompass not just JP Morgan’s wealthy clients, but also the retail sphere, the “private not public” argument is weakened, leading to even greater speculation about the future prospects of the bank coin.
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