More than five years after filing a patent for a "new paradigm for effectuating electronic payments", JPMorgan appears to have launched... a stablecoin.
Imaginatively titled "JPM Coin", the digital currency will be tied to the dollar, and is designed for the bank's institutional customers, who apparently will be able to use it to make instant payments among themselves.
Here's the bank:
J.P. Morgan this month became the first US bank to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional accounts.
JPMorgan, whose CEO Jamie Dimon (in)famously caused a sell-off in crypto in late 2017, mid cryptomania, when he said bitcoin was "a fraud", also says:
We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated.
So why is the bank launching the coin?
Exchanging value, such as money, between different parties over a blockchain requires a digital currency, so we created the JPM Coin.
JPMorgan doesn't really explain why it would want to exchange value over a blockchain in the first place, however. Unlike a public blockchain, in which the security of the system is maintained by a decentralised network of computers, JPM Coin would run on a private blockchain, the bank's own "Quorum Blockchain". Private blockchains are just centralised data stores, whose security is maintained by their owners (in this case the bank). It's not at all clear why the bank thinks using one can speed up its payments.
In fact, some might argue JPM Coin already exists and that it's just a JPM deposit by another name.
But far be it from us to naysay this fine stablecoin. What does JPMorgan itself think will be the impact on its clearing and settlement business, or indeed on other parts of the business? The bank, again:
It is still too early to assess the ultimate impact of blockchain on different businesses. We continue to work with our clients around the world to explore different use cases for this type of technology.
New paradigms all over the shop.
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