Crypto Newsletter 2/20: JPMorgan Launches Digital Currency
Jamie Dimon, the CEO of JPMorgan, has officially changed positions and thrown his hat in the ring: JPMorgan is now exploring applications of blockchain with JPM Coin. As a reminder, just two years ago, Dimon said digital currencies were a “fraud” and that anyone at JPMorgan who traded digital currencies would be fired.
So what is JPM Coin? JPMorgan’s digital currency is pegged to the US Dollar, acting as a stablecoin for internal transactions between JPMorgan institutional. The currency is issued on Quorum, JPMorgan’s enterprise blockchain built on top of Ethereum, and JPMorgan hopes the currency will enable instantaneous settlement between institutional accounts.
In short, JPM Coin is a stablecoin on a private (re: centralized) blockchain solely for JPMorgan users. It’s not exactly Nakamoto’s vision of open finance, but it is the first time that a US bank has issued their own digital currency.
For now, JPM Coin is just a prototype and will only be available to a few of JPMorgan’s institutional clients, but JPMorgan’s announcement does mark an important step forward for institutional involvement in crypto. Jamie Dimon may have had to swallow his words from two years ago, but he has now positioned his bank to integrate blockchain technology and streamline the bank’s existing business.
Welcome to the fold, Jamie.
What’s Happening In the News
In a contribution for Forbes, freelance writer Roger Aitken discusses the transition from ICOs to STOs and explores the question of whether STOs will be the next big thing in crypto.
NYSE Arca and Bitwise Asset Management have submitted a Bitcoin ETF rule change proposal, and the SEC has 45 days to review it before they have to approve, reject, or extend the proposal.
The island nation’s plan to launch a national cryptocurrency, named Sovereign, has met with controversy since the idea was announced. This article in Coin Telegraph serves as a timeline of what’s happened and where things stand now.
Articles We Read (And You Should Too)
Given JPMorgan’s announcement last week, it’s fitting to revisit Interstellar’s CEO Adam Ludwin’s letter to JPMorgan’s CEO Jamie Dimon. In a blog post, Ludwin, the former founder & CEO of Chain covers the purpose of crypto assets. An oldie but a goodie, and an excellent way to touch up on your argument for why cryptocurrency isn’t going anywhere even though the prices have been down for so long.
In a series of tweets, Eric Wall, the cryptocurrency lead at Cinnober, questions the theory that ‘banking the unbanked’ is the primary adoption case for cryptocurrencies. Instead, he suggests that in the near-term, crypto will be adopted by an app-savvy and experimental audience: children.