US investment bank JP Morgan announced the creation of its own cryptocurrency, with the goal of simplifying payment settlements between clients in its wholesale payment business.
According to the BBC the cryptocurrency, called JPM Coin, will be the first digital currency banked by a major US bank.
JP Morgan claims digital coins can be used to reduce risk and create instant transfers.
"We are supportive of crypto-currencies as long as they are properly controlled and regulated," Umar Farooq, JP Morgan's head of Digital Treasury Services and Blockchain, wrote in an online Q&A page.
Another company that is trying to achieve the same thing – payment settlement improvements – is Ripple, with its two products xRapid and xCurrent. Ripple uses cryptocurrency called XRP, currently third biggest cryptocurrency with a market cap of $12bn.
Commenting on the JPM news, Ripple CEO Brad Garlinghouse said the US bank ‘misses the point of crypto’. He tweeted: “As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer.”
JPM Coin will not be available to everyone. Instead, it will be used internally, by JP Morgan, to enable instant transfers. According to the BBC, 1 JPM Coin will be worth $1.
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