JP Morgan announced last week that it was launching its own cryptocurrency. But the move by the major bank has unleashed a wave of criticism from a swathe of experts, all saying it isn’t a cryptocurrency.
Perhaps it hasn’t helped that Jamie Dimon, JP Morgan’s CEO, is also an infamous “bitcoin basher,” so some pushback was to be expected when the institution suddenly launched a crypto token. Furthermore, despite Dimon’s tirades, JP Morgan has been in the crypto space for years, reportedly handling bitcoin trades while Dimon goes on television to decry Bitcoin a “fraud.” The whiff of hypocrisy is strong!
Nevertheless, the real issue here is the definition of a cryptocurrency. P.H. Madore, writing for CCN, remarks that the JPM coin highlights the fact that there are several definitions of cryptocurrency. He says, “Everipedia defines it as “a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets.”
At least one analyst was quick to assert that JPM coin would kill XRP. Madore’s response to this was: “My first thought on reading the news of JPM Coin was the obvious: why didn’t they use Ripple? Everything JPM Coin aims to do, Ripple has already done. Why reinvent the wheel?” Exactly! However, it is as he suggests “a chilling reality for Ripple. Much like any software-based product, nothing they’re doing is immune from being replicated or usurped.”
However, others are saying the JPM Coin is a “fraud.” Wes Messamore at CCN said, “So they’re using JPM Coin to keep track of how much money you’ve deposited and withdrawn. So they are offering basic banking as a new crypto. The embarrassing level of fail in this move is difficult to overstate.”
It’s nothing like bitcoin. Messamore goes on to say, “Once the bitcoin transaction has cleared, it’s irreversible. It’s much more permanent and immutable than a design stamped into a metal blank with a coin die and press.” And then he contrasts it with using JPM Coin: “But all that’s happening with JPM Coin, a stablecoin pegged to the dollar at a 1 to 1 ratio, is a client gives JPM a dollar, and JPM’s computer remembers it gave them a dollar and that they’re obligated to give it back when the customer wants to withdraw it.” Adding, “The only meaningful difference may be that they’ve worked up some solutions to manage transfers between accounts faster and can verify more quickly whether there are errors.”
Some have even tweeted, “The most popular token for money laundering this year will be JPM Coin.” And one said it should just be called “FraudCoin.”
What do you think?