One of the hot topics these days is JP Morgan's recent announcement that the bank will issue its own cryptocurrency, JPM Coin. However, this is not just a new crypto, but a direct new competitor to Ripple Labs and their XRP.
XRP is well known for being the cryptocurrency developed and used by Ripple and its products. The company's goal is to improve the method banks use for sending payments, especially when international transactions are concerned. Thanks to its products, such as xRapid and xCurrent, as well as the cryptocurrency XRP, Ripple quickly became a company known throughout the world.
However, this also quickly attracted competition, this time in the form of JP Morgan's new coin. The financial world is the business world, and the business world is ruthless. It is not unheard of for companies to either buy a startup which has a brilliant new idea or to even directly copy that idea.
And, as mentioned, JP Morgan came up with JPM Coin, a coin that may not even be an actual cryptocurrency. However, even if it is not a true crypto, it still managed to combine the best aspects of the crypto world and mainstream finance to create a product that banks will likely appreciate, maybe even more than the revolutionary XRP.
JP Morgan's project took the blockchain technology to make their transactions faster, while their coin also has aspects of the stablecoin, being pegged to USD. Furthermore, it allows users to get the coins by depositing their USD in the bank. The coins can then be transferrable between the bank's clients or cashed out at a later date. And, since JP Morgan already has quite a worldwide reach, it has a significant advantage over Ripple and XRP.
Historically, situations like this are not particularly good for young startups such as Ripple. However, the firm's CEO, Brad Garlinghouse, stated that the company is not worried.
As soon as people realized what JPM Coin might mean for Ripple and XRP, they were waiting to see the company's reaction. Soon enough, Ripple CEO, Brad Garlinghouse, responded by leaving a Twitter statement.
In his tweet, Garlinghouse says that the banks are having a change of heart regarding cryptocurrencies, as predicted. However, he also argues that JP Morgan project missed the point, as there is not much point in introducing a closed network in this day and age.
XRP and other cryptocurrencies are open and universal, which means that anyone in the world can use them as units of value. This is what gives them value in the first place, and what makes them revolutionary and practical. JP Morgan took that away right from the start by making a coin only available for use within the bank's 'walls,' thus preventing it from ever reaching global usage.
XRP can also be used in several ways, such as for sending or receiving transactions, HODLing, and alike. Meanwhile, the JPM Coin only has a single purpose, which is to complete the transaction, and that is where the story ends. As a result, the coin might be interesting to those who aim to use cryptocurrencies for remittance. However, while XRP and Ripple do not feel threatened, they still need to set their priorities.
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