On the 14th of February 2019 (Valentine’s day to some), the tech community was enthralled to receive news of JP Morgan Chase’s official release of its digital currency, the JP Morgan coin. According to official reports, “the JPM Coin is designed for business-to-business money movement flows”, but is still in test phase which means that it is not available to individuals at the moment.
The American multinational investment bank introduced its JPM coin to work similarly as the Bitcoin. It was designed to speed up transactions between the bank’s customers. It uses US dollars as its primary trading currency which reduces its volatility. The JPM coin is the first major bank-affiliated digital coin to be introduced in America for global scale usage.
JPM coin is worthy of note because it affirms the potential of blockchain in the global financial system. It is built on Quorum (an Ethereum-based Blockchain also created by JP Morgan). But what does JPM coin really mean for cryptocurrency?
Understandably, many cryptocurrency enthusiasts do not acknowledge JPM Coin as a cryptocurrency, which we agree with. However, its creation is a step in the right direction. In other, to drive cryptocurrency adoption, blockchain needs to be adopted by traditional financial institutions, and the size and sheer influence of JP Morgan Chase makes it the best place to start.
According to the company, the coin, which at present is still in its pilot stage, it is slated to be tested with a “small number” of its clients. This “small” sample is a total of 27 million accounts! Whether or not the test is successful, the data gathered will be monumental in the advancement of cryptocurrency and blockchain in general. In addition, other companies will be able to assess and develop based on these research materials.
The introduction of JPM Coin is a win for cryptocurrency, as it lends legitimacy to Bitcoin and its potential which some have regarded as a fraud. While, Bitcoin, might not directly be affected by JPM coin, cryptocurrency trading, in general, will benefit. Confidence in cryptocurrencies will also be strengthened by JP Morgan’s affiliation.
In summary, cryptocurrency benefits from the creation of JPM coin in three major ways:
- Validation of cryptocurrencies as the future for financial systems.
- The massive sample size for future testing and referencing.
- Drive adoption and confidence in digital currencies.
The existing financial systems took decades, no, near centuries to become what it is today. Cryptocurrency is a long term game so the way we see it JPM Coin has made it one day shorter.
This article is in partnership with Quidax. Quidax is a European based digital assets exchange with a focus on Africa. We provide a seamless platform for users to send, receive, buy and sell cryptocurrencies using their local currencies.