Altcoin News: Ripple CEO criticized JPM Coin
Ripple CEO Brad Garlinghouse said that representatives of the investment bank JPMorgan, who on Thursday announced their own JPM Coin, do not understand the essence of cryptocurrency.
“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,” Garlinghouse wrote in a Tweet.
Garlinghouse also refers to his own article from two years ago, in which he speaks negatively about banking cryptocurrencies. He believes that the organizers of such projects are guided by incorrect prerequisites and create “an even more fragmented monetary landscape than we have today.”
“When banks are faced with the problem of exchanging their unique digital assets among themselves, they will either have to organize a separate market, or everyone will exchange their cryptocurrency for fiat money and then convert them into a coin of another bank. But this is complete nonsense!“, — said the CEO of Ripple.
According to the announcement, at first, JPM Coin will be used for minor cross-border payments between corporate clients, so that it will be possible to reduce the transfer time and avoid such structures as SWIFT.
Citing the opinions of several experts, the Bloomberg information portal writes that these characteristics of the JPMorgan digital coin make it a direct competitor to Ripple, which also specializes in cross-border payments on the blockchain in the banking and corporate sectors.
“Ripple has made a name for itself with grand ambitions of replacing the Swift network used by banks, individuals and businesses to send and receive money. In JPMorgan it meets a challenger who moves more than $5 trillion in wholesale payments each day, meaning even a small experiment from the banking giant could have a big impact” writes Bloomberg.
“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.”
At the same time, another expert noted that, unlike XRP, JPM Coin is a stablecoin and has a clear peg to the dollar, so it can be much more attractive for financial institutions.
CME Group CEO Terry Duffy said that large banks will have a hard time working with cryptocurrencies until governments start accepting them. He noted that this step shows the position of the largest financial institutions that are beginning to change their point of view regarding cryptocurrency.
Duffy recalled that initially, JPMorgan was rather skeptical about Bitcoin, and the bank’s CEO Jamie Dimon in September 2017 called Bitcoin a fraud. He later admitted that he regretted his words, and now JPMorgan clearly refers to new digital assets differently.
However, Duffy believes that the success of cryptocurrency does not depend on the arrival of institutional players in the industry.
“The key to the success of any currency, whether it’s fiat or crypto, is going to be associated with the government. So I think the government needs to be more involved,” said the head of the CME Group.
When Duffy was asked about whether Bitcoin reached its bottom and was ready to recover, he replied that he is not sure about that and therefore could not give clear comments.
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Author: Marko Vidrih