JP Morgan is rolling out the first US bank-backed cryptocurrency
As reported by The New York Times, JP Morgan officially became the first major US bank to launch a cryptocurrency called JPM coin that is going to have real-world use. It is a mistake to think that Mr. Dimon is anything but for blockchain, as his previous comments concerned the “people’s currency”, not the underlying technology-blockchain.
The JP Morgan executive responsible for blockchain strategies initiatives at the bank said that customers were those that they demanded new and innovative ways for their money to be transacted with through blockchain.
However, there is one significant difference between the JPM Coin and other cryptocurrencies: the former will be controlled directly by JP Morgan itself. Each coin will be backed up by a US dollar. This is positive news since the bank is essentially minimizing the price volatility that is “native” to cryptocurrencies.
Another specific detail regarding the JPM Coin is, as reported by the NY Times:
JPMorgan’s version will be less useful than other similar products because it will not be possible to move it outside the firm’s own systems, at least initially. What’s more, it is still just being tested and is not available to clients yet.
While the coin is still not available to JP Morgan’s clients, the advantage of the digital token will be the fast transaction speed that customers will enjoy, a benefit that is very important especially for transferring large sums of money.
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,” said Umar Farooq, head of J.P. Morgan’s blockchain projects. “The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”
