Why Ripple’s CEO Brad Garlinghouse Needed To Criticize JPM Coin

Brad Garlinghouse, CEO of San Francisco blockchain company Ripple, praised JP Morgan Chase qualified Wednesday for producing his own stable coin, before dismissing the likelihood of the product being adopted by other banks and questioning its usefulness. After a fireside chat at the D.C. Blockchain Summit in Washington, D.C. Chamber of Digital Commerce, Garlinghouse said he thought it was “great” to have major financial star players like JP Morgan “leaning in.”

The usefulness of JPM Coin

Indeed, Garlinghouse, whose firm has courted financial institutions to use its distributed ledger technology (DLT) for payments–including products that use cryptocurrency XRP–promptly casts doubt on the opportunities for the recently announced JPM Coin. Garlinghouse recalled at another conference last week, “This Morgan Stanley guy interviewed me, I said,’ So, will Morgan Stanley use the JPM Coin?

Then he said’ certainly not.’ So, will Citi use the JPM Coin? Is it BBVA? Is it a PNC? And the response was no.’

Therefore, he suggested, a bank generating its own stable coin risks emulating the very problems that DLT is meant to solve. “So, does that really mean we’re going to have all these different coins? Are we back right to where we lack compatibility? I just don’t get it. “Garlinghouse even began to sound like a blockchain industry critic when he asked aloud what the point would be to tokenising fiat currency when it remains in the books of a single entity. “

“If you give them a deposit dollar to deposit, they’ll actually give you a JPM Coin to move into the JPM ledger. Wait for a minute, just use the dollar! “He said it. “I don’t understand that. If you’re just going to move within the JPM ledger, and it has to be dollar-to-dollar, one-to-one backing, I don’t really understand what issue it solves.

“However, he wrapped his comments on the subject on a conciliatory note, concluding:”

Return to my first answer, if it solves JPM’s first[ problem] leaning on cryptography, yay. That’s all I have.

Why JPM Coin Will Not Be a Big Deal

The news that JP Morgan got into crypto made a lot of people bullish on crypto again. Everyone is seeing 1000% gains overnight and a new crypto decade of successful investment. But they probably shouldn’t. JP Morgan created their so called ‘ JPM Coin’ because of other reasons:

  1. As any banking business – You’re either doing something or you’re left behind. Do you think JP Morgan wants to be left behind? I don’t think so. So, they decided to launch the JPM Coin. Not to change it – but to be the first to do it and probably gain an increase in stock value. This news surely had an impact as the shares of JPM grew from $102,42 to $105,55 in less than a day.
  2. Its a stablecoin – Yes, its a stablecoin. Why do we need another one? Because this one is create by JPM – ones of the ‘most trustful and reliable banks‘. They claim the token will be backed 1 to 1 by USD. But the ledger would be private. So, what’s stopping them from manipulating the transactions?
  3. Their image is tainted by the past not so great news they had. Money laundering, bad management and so on. Would you trust a JPM Coin? I wouldn’t.

Brad Carlinghouse Criticizing Them Is Great 

Ripple is a great cryptocurrency – but there are two things – you either love it or hate it. Its rarely the cases when someone just doesn’t care about it. People were complaining that Ripple is centralized, that its not really a cryptocurrency, that its premined and so on.

But, Ripple solves a real-life problem. JPM Coin don’t. Brad is making the right choice by criticizing his competition. Instead of creating their own cryptocurrency, they could have worked with a stable coin that it already exist ( as there are at least 5 of them in top 100), use the Ripple’s protocol, use the Stellar one or any other options. They chose to create an in-house cryptocurrency that no one knows too much about it with a private ledger.

So, again – we have to trust the banks that they won’t do ‘anything shady’ with a private ledger where only they have access. Sounds reasonable. Basically, its still unknown if the JPM Coin would it really be a cryptocurrency or a bookkeeping helper for JP Morgan.

If you give them a deposit dollar to deposit, they’ll actually give you a JPM Coin to move into the JPM ledger. Wait for a minute, just use the dollar!

Where’s the point of JPM Coin? We don’t know yet.


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