Ripple (XRP) CEO Brad Garlinghouse says the newly-announced digital asset from United States banking giant JPMorgan Chase ” misses the point” of cryptocurrency, according to a tweet published on Feb. 14.
As reported, JPMorgan Chase revealed its blockchain-powered JPM Coin yesterday, saying the asset will initially be used to increase settlement efficiency in select operations. Directly following the announcement, Garlinghouse responded on Twitter:
“As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer”.
The CEO linked his comments to an earlier article he penned two years ago, critiquing the prospects of proprietary bank-issued digital coins – which he dubs bank coins. In his earlier piece, Garlinghouse had argued that such projects are misguided, and would inevitably culminate in ” an even more fragmented currency landscape than what we have today”:
“If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!”
Notably, as reported, JPMorgan has outlined that JMP Coin will be initially be focused on facilitating international settlements by major corporations, helping speed up transactions that currently take a day or longer using existing options such as SWIFT – a similar prospective area of application to that of Ripple.
Indeed, Garlinghouse just recently underscored Ripple’s own professed ambitions to supplant SWIFT’s global interbank network, commenting that ” what we are doing on a day-to-day basis is in fact taking over SWIFT”.
A Bloomberg article has today cited multiple industry figures who argued that JMP Coin risks a becoming a direct threat by encroaching upon Ripple’s turf – the cross-border payments and remittance market for banks and enterprises.
One industry expert noted that “JPM’s project is much more evolutionary than revolutionary – it is utilizing a private, permissioned blockchain technology called Quorum, which is much closer to a Google Sheet than a Bitcoin. The project is clearly competing directly with Ripple Labs and their centralized cryptocurrency XRP”.
Lastly, unlike Ripple, JPMorgan Chase has designed its asset as a stablecoin by means of a U.S. dollar peg – which a different commentator argued could heighten its attractivity for financial institutions, who may shun a volatile unit of exchange for settlement and payments.
As Garlinghouse also noted, the JPMorgan Chase move represents something of a volte-face: the bank’s CEO Jamie Dimon is notorious for having openly condemned Bitcoin as a ” fraud”. Dimon later diluted his antagonism in private comments to Cointelegraph at the World Economic Forum last year.