On 14th February, Cointelegraph reported JPMorgan Chase introducing their cryptocurrency called JPM Coin. Like Bitcoin, JPM Coin speeds up transactions between JPMorgan customers. Unlike other highly volatile cryptocurrencies, JPM Coin is pegged to the US Dollar- like a stablecoin. This is monumental news because JPMorgan Chase is the first major United States bank to introduce its own digital coin for real-world usage. The news further emphasizes Wall Street's positive sentiments about blockchain technology.
Despite his critique of Bitcoin in September 2017, CEO of JPMorgan Chase, Mr. Jamie Dimon, has affirmed blockchain technology's potential in the future global financial system. JPMorgan Chase has been experimenting with the technology in the form of Quorum, its blockchain for enterprise platform for years. Though only a tiny fraction of JPMorgan's total payments will be transmitted for now, JPM Coin is definitely one to celebrate.
Here are 3 Reasons Why Their Announcement is Awesome for Blockchain Adoption.
1. JPMorgan has validated Blockchain Technology's massive potential
We discussed three trends that show that the world is warming up to Blockchain Technology in our article about blockchain adoption. The private sector has a key role in getting blockchain adopted by the masses. JPMorgan Chase is the largest bank in America, with $2.53 trillion in assets. They are serving millions of consumers, small businesses and many of the world's most prominent corporate, institutional and government clients.
JPMorgan Chase scored the highest amongst its competitors for customer satisfaction in a study by J.D. Power. We now have clear representation from one of the biggest corporate names in the world with the creation of JPM Coin. It serves as a credible validation of the massive potential that lies within blockchain technology.
2. Blockchain now has a massive sample size to be tested on
Example of JPMorgan Chase Data Sample
Blockchain technology is still immature, and scalability is an ongoing issue. But the fact that such a huge bank has adopted the technology proves that global blockchain adoption might not be too far off. The image above details JPMorgan Chase’s sample size. JPM Coins are in the testing phase as of 2019, and the pilot program will only be available to institutional clients. Quoting the company:
"JPM Coin is currently a prototype that will be tested with a small number of J.P. Morgan’s institutional clients, with plans to expand the pilot program later this year. JPM Coin is currently designed for business-to-business money movement flows, and because we are still in a testing phase, we don’t have plans to make this available to individuals at this stage. That said, the cost-savings and efficiency benefits would extend to the end customers of our institutional clients."
JPMorgan Chase’s experiment with a sample size of 27 million accounts will serve as valuable data for other companies. It is unclear how successful JPM Coin will be with consumers, but findings from prototype testing will be important for driving consumer blockchain adoption.
3. JPM Coin Might Finally Prove That Bitcoin is NOT a fraud
JPMorgan CEO Jamie Dimon called Bitcoin a fraud in 2017 and declared cryptocurrencies worse than tulip bulbs. In early 2018, Dimon regretted calling Bitcoin a fraud. His criticism of trading cryptocurrencies, however, remains valid due to extreme speculation. Nonetheless, there is a positive outcome in 2018. which saw the beginning of the longest crypto winter in history, is a shift in general emphasis on cryptocurrencies’ speculative nature, to emphasize on the value of the underlying technology.
The creation of JPM Coin is a huge win for blockchain, not Bitcoin. Bitcoin's prices will remain the same because the assets under JPMorgan Chase will not flow into Bitcoin. However, JPMorgan Chase’s involvement in Blockchain further strengthens confidence in Bitcoin as an alternative means of transaction for consumers.
A strong analogy would be the emergence of file-sharing in the early 2000s. Back then, most people either rented a DVD or just illegally torrented off the internet. To create a legal alternative to torrenting, the world then invented streaming services in Netflix, Spotify, and many others. Population demographics are shifting and millennials increasingly seek alternatives to banks. Therefore, Bitcoin will eventually find its place as a universally accepted means of value transfer.
We Are In The Right Space
Those who are in the Cryptocurrency and Blockchain space are primed to experience the next revolution. I’m in my late 20s and have witnessed the turn of the information era brought, on by the Internet. As the world becomes even more interconnected, I have a feeling that blockchain technology will be at the forefront of exciting things to come.
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