Jamie Dimon may have hated Bitcoin, however they have seemingly been interested in blockchain for quite some time. Now JPMorgan announcing that JP Morgan will be launching it’s own cryptocurrency/stable-coin, which will be backed by the U.S. dollar, on a 1:1 ratio.
Less than two years after J.P. Morgan Chase boss Jamie Dimon famously bashed bitcoin as a “fraud” that global governments would “crush,” he is pushing his company headfirst into the cryptocurrency/blockchain space, launching its very own digital coin. It will be the first major American bank to do so.
Don’t Confuse the “JPM Coin” with Bitcoin, XRP, and others
- Cryptocurrencies such as Bitcoin and XRP are decentralized, meaning its value isn’t controlled by the Federal Reserve or any government authority.
- Unlike Bitcoin, JPM Coin is pegged o the US dollar, and alleged to be backed by actual greenbacks held in designated accounts at JPMorgan.
- Bitcoin, XRP, and other decentralized cryptocurrencies are available to the world, whereas the “JPM Coin” will be issued to JPMorgan clients only when they deposit money into a particular JPMorgan account.
The JPM coins can then be used to transfer money to someone else’s account over the blockchain. The recipient of JPM Coins would then exchange them for fiat currency. The technology would reduce the typical settlement time for transactions, the bank says in its handy FAQ section, without mentioning any details about how much these instant blockchain-based transactions will cost customers.
However, the company said that the JPM Coins are in testing for the time being, and only institutional clients will have access to the pilot program, mentioning that savings may be passed on to their customers:
JPM Coin is currently designed for business-to-business money movement flows, and because we are still in a testing phase, we don’t have plans to make this available to individuals at this stage. That said, the cost-savings and efficiency benefits would extend to the end customers of our institutional clients.
In other words, you won’t be able to use JPM Coin to trade other cryptos on exchanges. Well, not yet anyway.
The bank noted that JPM will run on the Quorum Blockchain at first, and then will be extended to other platforms and will eventually be operable on all standard blockchain networks.
What’s interesting to note is JPMorgan’s changing stance on cryptocurrency products. As Reuters reminds us, JPMorgan CEO Jamie Dimon called Bitcoin a “fraud” in 2017, saying that cryptocurrencies are “worse than tulips bulbs” at the time. He tempered his view a few months later when he said he regretted calling Bitcoin a fraud, but still said he wasn’t interested in the coin. JPMorgan’s position is now in favor of cryptocurrencies as long as “they’re properly controlled and regulated,” according to its presentation page.