- JPM Coin’s launch causes mainstream financial news to question Bitcoins viability
- XRP is far more under threat than Bitcoin due to its sole purpose as a cryptocurrency to help banks settle cross border payments faster (something JPM coin also seek to do)
Last week the news of JP Morgan developing its cryptocurrency made waves all across both the crypto space and the traditional financial media.
In this story, there are some remarks of the ways JPM coin could bring more attention and adoption to Bitcoin and blockchain. However, some traditional outlets dared to suggest that JPM Coin could make Bitcoin obsolete.
This would be like suggesting Google+ would make Facebook obsolete: Just because a larger mainstream organization creates a knock-off version of something revolutionary, does not mean it will then become more widely used than that revolutionary invention.
Naturally, crypto users found this statement to be hilarious, with many pointing out the CNBC’s inability to grasp a basic understanding of a technology they have been covering for more than a year now.
The crypto community is fully aware that the JPM coin is nothing more than JP Morgan’s attempt to pick the components of blockchain technology that suits their needs (i.e., faster transaction times) while ignoring all the other elements that make the technology powerful, such as decentralization, which allows for better privacy and security.
JPM Coin and Ripple
Despite what CNBC or JP Morgan tells you, the idea of a company developing a centralized cryptocurrency on top of a unified ledger for banks to settle transactions faster is not only unoriginal, it is the same value proposition being offered by Ripple protocol and its cryptocurrency XRP.
Before JPM coin can establish a genuinely decentralized and globally distributed network, it will be ridiculous to compare it to Bitcoin. However, the same cannot be said for Ripple, whose sole purpose was to develop a private ledger that would allow Bank partners to settle transactions faster using XRP.
The problem Ripple has now is that JPM coin seems to offer the same value proposition as XRP, except with the added benefit of a much bigger brand name amongst banks, plus the use of a cryptocurrency that is pegged to the US dollar (also known as a stable coin).
For highly risk-averse Banks, the last thing they want to deal with is XRP’s volatility forcing them to lose 2,3 or 4% from every transaction.
With JPM coin, there is no risk of loss due to volatility, plus Banks can jump unto a ledger that could very easily also attract 80% of the Fortune 500 companies, which are JPM customers.
Ripple appears unfazed
Despite the apparent threat to their business, Ripple, having now signed 200 partner banks and sitting on a $12.7 billion market cap, seem to be taking the news lightly.
Ripple CEO, Brad Garlinghouse recently stated; “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,”
If I didn’t know any better, I’m pretty sure Satoshi Nakamoto would have made the same statement about XRP when it first launched in 2012.