The Announcement of the launch of the coin is a surprise to the crypto world since, Jamie Dimon of JPMorgan has called Bitcoin “fraud” which took into the minds of many the unpredictability of the new technology. The adoption of the technology by the firm which has $6 trillion worth transactions a day,is definitely going to foster the Crypto world.
JPM coin is Regulated Crypto unlike Bitcoin
The entry of JPM into cryptos awaits a time Bullish market,while it’s important to take note that the retail investors will most probably never be able to own a JPM coin.Only the big institutional clients of JPMorgan like broker-dealers,banks and corporations can use the tokens.
Even when Bitcoin was bashed by Jamie Dimon he and his team supported the use of regulated cryptocurrencies.
The JPM coin adopts the concept similar to Stable coins where the value of the coin doesn’t fluctuate. In-other words, $1(USD)=1 JPM Clients will be issued the coins after depositing dollars at the bank; after using the tokens for a security purchase or payment on the blockchain, the bank destroys the coins and gives back the client the equivalent amount of dollars.
Why JPM Coin?
Initially three applications are focused for the JPM Coin, according to Umar Farooq, head of J.P. Morgan’s blockchain projects.
1.The first is for international payments for large corporate clients, which is now happening using wire transfers between financial institutions on old networks like Swift. The cumbersome settlement problems because institutions have cut-off times for transactions and countries operate on different systems, the payments will settle in real time, and at any time of day.
2.The second is for securities transactions. Earlier in April, J.P. Morgan tested a debt issuance on the blockchain, creating a virtual simulation of a $150 million certificate of deposit for a Canadian bank. Rather than relying on typicals to buy the issuance(resulting in cumbersome payments) institutional investors can use the J.P. Morgan token, resulting in instant settlements.
3.The final use would be for huge corporations that use J.P Morgan’s treasury services business to replace the dollars they hold in subsidiaries across the world. Unlike in retail customers, the company handles a significant amount of the world’s regulated money flows for many companies moving dollars for activities like employee and supplier payments. This generated $9 billion in revenue last year for the bank.