Wall Street analysts deride new JPMorgan crypto
JPMorgan recently announced that it has begun to offer its own version of a cryptocurrency stablecoin, the JP Coin. It was a surprise move from a company that has repeatedly bashed crypto as being nothing more than a fraud, and many viewed the change in strategy as the financial giant finally realizing the true value of digital currencies. Wall Street analysts have started to speak up, however, and think that it might just be an attempt by the company to bank on the hype of crypto to improve its financial situation.
A former JPMorgan employee and the founder of the Kadena blockchain firm, Will Martino, explained to The Block, “It is far from fulfilling the promise of creating an ecosystem whereby all participants can utilize a universally accepted and redeemable digital currency. Instead, it is a mechanism where JPM will redeem a token that it issues on its platform only.”
He further asserted, “This is akin to getting limited to only being able to buy, gamble, and cash in your gambling chips at one specific casino.”
JP Coin, according to JPMorgan, is only used for a small portion of the company’s cross-border payment services. The company asserts that it decided to embrace crypto because it was, as crypto enthusiasts have said all along, safer, faster and cheaper.
Always a crypto skeptic, Nouriel Roubini said on Twitter, “It is private not public, permissioned not permissionless, based on trusted authorities verifying transaction not trustless, centralized not decentralized.”
According to The Block, it had reached out to other Wall Street analysts, as well, and heard back from more than a few. One, who wouldn’t give his name, stated, “The announcement is a non-event. Maybe you’ll see minor incremental margin efficiency gains within their settlement division, but those numbers will be immaterial to the bottom line for the foreseeable future.”
Not everyone views the move as negative. The co-founder of ConsenSys Capital, Andrew Keys, states, “Winners of this are JPM as [one of] the first movers, JPM’s clients that will have increased liquidity and decreased settlement latency, and the Ethereum community as this is an endorsement of the technology. Losers of this are definitely Ripple and R3.”
To receive the latest CoinGeek.com news, special discounts on CoinGeek Conferences and other inside information direct to your inbox, please sign up for our mailing list.