Amidst all the speculations and debates about the ability of cryptocurrencies to store value, the US banking giant, JPMorgan & Chase announced the launch of their own digital currency. The “JPM Coin” is expected to conduct a tiny fraction of the bank’s $6 trillion daily transactions.
So, What is JPM Coin?
The JPM coin has been created on top of Quorum which is an enterprise-focused variant of Ethereum blockchain platform. This new”cryptocurrency” from JP Morgan Chase isn’t exactly a Cryptocurrency. It is more like a digital representation of basic banking. It can be only used to represent your money located within a Morgan Chase account. Stable coin will be a more matching description for JPM coin and it looks promising enough to spread all over other banking systems in the near future.
How does it work?
Unlike the Bitcoin and Ethereum, the value of a JPM coin is pegged to the US Dollar. So one coin will be always equal to $1. Once a customer transfers his money through the bank, the fund will be transformed into an equal number of JPM Coins. These coins will be transferred instantaneously to the recipient and he can redeem it from the bank.
Why JP Morgan and Chase are launching a Digital Coin?
In early 2018, the bank had expressed its interest in the blockchain technology and cryptocurrencies with proper control and regulation. The ability of these technologies to enable immediate value transfer and lower capital requirements have always attracted such financial firms. Most large banks in the world are now doing their research in the blockchain technology to find a cure for many woes present in the financial sector.
One of the major woe JP Morgan chase trying to solve through the JPM coin is the ageing Swift transaction networks. With this new coin, the bank will be able to provide a faster, cheaper and reliable environment for value transactions.
The Important After Effects of this Launch
JP Morgan Chase is the first major financial institutions in the US to introduce its own digital coin. It can be seen as a positive sign towards the upcoming applications of blockchain technology. By introducing JPM coin, the bank has validated the credibility and reliability of blockchain technology which will motivate other private and government institutes to adopt the technology.
The huge size of JP Morgan and Chase bank will help the rest of the world to understand more about the scalability and global adoption of the blockchain. With around 27 million accounts to serve data, the end result of this digital coin will influence the consumer blockchain adoption.
However, this facility is not yet available to the general public. According to the bank, the coin is still in its test phase. As of now, this service will be limited to a few institutional clients. With other large banks including Citi moving forward with their blockchain research, in a very near future, we can expect the more interventions from this tech into the traditional systems.
BBA in FinanceCo-created with Jain University4.3 out of 5 by 211 learners2x
MBA in Investment BankingCo-created with Jain University4.5 out of 5 by467 learners2x industry demand
MBA in FintechCo-created with Jain University4.4 out of 5 by 349 learners2x industry demand
Post Graduate Program in Business Management with NMIMSCo-created with NMIMS4.7 out of 5 by 669 learners4x Industry Demand
Post Graduate Program in Banking and Credit Underwriting4.7 out of 5 by 1376 learners12 X industry demand
Post Graduate Program In Finance And AccountingCo-created with Grant Thornton4.9 out of 5 by 238 learners14 X industry demand
Professional Certification in FinTechCo-created with SP Jain School of Global Management4.6 out of 5 by 1421 learners6X industry demand
Credit Risk and Underwriting ProdegreeCo-created with Moody’s Analytics4.6 out of 5 by 1139 learners4X industry demand
Banking And Wealth Management Bootcamp4.6 out of 5 by 1429 learners3X industry demand
Post Graduate Program In Capital Markets4.7 out of 5 by 807 learners3X industry demand
Imarticus Learning is India’s leading professional education institute that offers training in Financial Services, Data Analytics & Technology. We’ve successfully transformed careers of over 35,000+ individuals globally through our Certification, Prodegree, and Post Graduate programs offered in association with leading and renowned global organisations in the Financial Services, Data Analytics & Technology domain.