Bitcoin began in 2009, and the movement towards a future with widespread deregulated currency was born. Since then, many other assets have taken advantage of Bitcoin’s blockchain technology to change banking.
Interestingly, recent trends show that banks are starting to consider this technology. One of the most prominent players is J.P. Morgan Chase, with its implementation of a new coin.
But what is the J.P. Morgan cryptocurrency? Is it a worthwhile investment? What does this mean for the future of crypto and the company?
Below, we discuss the rollout of J.P. Morgan cryptocurrency and its implications for the investing world.
Like much of the banking industry, J.P. Morgan was initially opposed to cryptocurrency. The institution banned credit card customers from purchasing Bitcoin, and CEO Jamie Dimon bashed the coin as a “fraud.”
However, the reservations largely stemmed from cryptocurrency’s decentralized nature and its competition with bank services.
The Origins of J.P. Morgan Cryptocurrency
Despite the bank’s strong stance on cryptocurrency, the company had a change of heart. It realized that much of the world was adopting this technology and wanted to get with the trends. Plus, it wanted to reap the fast transactions and security that come with a blockchain network.
In a move that surprised many investors, J.P. Morgan announced its plans for JPM Coin in February 2019.
Development of JPM Coin
In the summer of that year, the bank started JPM Coin trials using Quorum. In-house developers created this private blockchain network based on Ethereum. Even though ConsenSys has since acquired Quorum, JPM Coin continues to operate on this network.
After going through extensive testing, JPM Coin officially became available in late October 2020. The first client to use the token was an undisclosed major tech firm.
Since its initial launch, J.P. Morgan cryptocurrency has become available to select institutional clients. They depend on it for its fast, secure transactions and use it for applications such as:
• Securities transactions. With JPM coin, institutional investors no longer have to rely on lengthy wire transfers.
• International payments. Historically, international payments have faced delays because of transaction cut-off times and countries operating on different systems. This token lets international payments occur instantly, no matter what parties are involved in the transaction.
• Treasury services. Instead of moving large sums of physical money around the world, treasury services can take advantage of the digital nature of JPM coins.
Deviance From Traditional Cryptocurrency
Despite releasing its own cryptocurrency, J.P. Morgan hasn’t gone fully traditional.
For one, unlike Bitcoin and other assets, JPM Coin is centralized. It’s also what investors refer to as a stablecoin, meaning the token is equivalent to one U.S. dollar and will always be directly connected to this asset’s value. As a result, it’s unlikely to experience the major price fluctuations we’ve come to expect from other tokens.
Future Implications of JPM Coin
The rollout of J.P. Morgan cryptocurrency shows blockchain technology is becoming more mainstream, even among institutions that previously dismissed cryptocurrencies. Investors beyond the bank’s major clients look forward to the coin becoming more widely available, and we expect this new coin to only increase in popularity throughout the next few years.