Ripple’s CEO, Brad Garlinghouse, has finally responded to JPMorgan’s recent announcement of its new JPM Coin. Is Ripple feeling the pressure or just annoyed with a bank adopting a similar system? Let’s find out.
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. 2 years later, and bank coins still aren’t the answer https://t.co/39EAiSJwAz https://t.co/e7t7iz7h21
— Brad Garlinghouse (@bgarlinghouse) February 14, 2019
Ripple CEO Responds to JPM Coin News
Long before this tweet, Garlinghouse released a blog post titled ‘The Case Against BankCoin’ on his LinkedIn back on August 24th, 2016. The post describes the very thing that was just recently released by JPMorgan. In his earlier piece, Garlinghouse feels these projects are misguided and would cause even more friction than what our current currency landscape has now.
The CEO explained:
“If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!”
Garlinghouse believes that if each major US bank adopts its own coin, the system will become flawed because they aren’t all using the same digital currency and blockchain system.
SWIFT is the current financial system both projects are attempting to replace, and many analysts speculated yesterday that JPMorgan’s new project will be a direct threat to Ripple.
“JPM’s project is much more evolutionary than revolutionary—it is utilizing a private, permissioned blockchain technology called Quorum, which is much closer to a Google Sheet than a Bitcoin,” said Travis Kling, the Los Angeles-based founder of crypto hedge fund Ikigai Asset Management. “The project is clearly competing directly with Ripple Labs and their centralized cryptocurrency XRP.”
It is highly unlikely that if other major US banks get on board, they will adopt the JPM Coin. Most likely, each bank will want to use its own system and coin—after all, they are competitors. Like Garlinghouse said, that could make for an even more messy financial system than the one we currently have.
The biggest contention point between XRP and the new JPM Coin is its value. JPMorgan said yesterday that its coin is directly pegged to the US dollar, making it a stablecoin. XRP, on the other hand, is not, which may be a reason why most of the major US banks have opted out of using Ripple and XRP for cross-border transactions and remittances.
JPMorgan will start testing its digital currency in small doses within the next few months. It will be interesting to see how the other major US banks respond and if they will start trying to whip up their own blockchain and digital currency.
What are your thoughts? Is the JPM Coin a major threat to Ripple and XRP?
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