J.P. Morgan Chase connected 220 banks to it’s Quorum-based Interbank Information Network and completed planned integration work using Microsoft Azure and National Bank of Canada with the intent to streamline a number of financial processes.
This includes but is not limited to;
- and interest rate payments.
The results were exciting for JPM Coin awaiters. Real-time settlements have been integrated, indicating they’ve successfully launched a digital currency. Source.
Why is this bizarre to many?
Jamie Dimon’s Love of Bitcoin
According to J.P. Morgan’s official website they’ve supported cryptos;
“We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies...
Some in the crypto-community have highly disagreed with this statement.
Jamie Dimon is the Chairman and CEO of J.P. Morgan Chase, the largest bank in America, also served on the board of directors of the Federal Reserve Bank in New York. It’s wise to assume Dimon knows a little about money, so it was no shock when his negative comments on Bitcoin made world news.
During the ‘Delivering Alpha’ conference in 2018, Jamie Dimon laughed, “My daughter bought some bitcoin and it went up and she thinks she’s a genius now.” This was following Dimon’s long history of Bitcoin bashing statements.
Looking back we heard him state Bitcoin was a “terrible store of value.” as early as 2014.
A year later, in 2015 he said “Bitcoin will not survive”.
September 2017 he very publicly termed Bitcoin a “fraud” and threatened to fire any of his staff that used it. Dimon later said he regretted stating BTC was a “fraud”. Source
Not a Fan of Bitcoin, Loves Blockchain
Dimon never had anything but praise for the underlying technology found in Bitcoin, evidenced not only by his statements, but also within his actions.
J.P. Morgan Chase has been experimenting with blockchain technology for several years. With the desires of regulation, J.P. Morgan plans to evolve within the digital revolution and continues to be one of the largest ‘cash cows’ in the world with $2.5 trillion worth of assets Source
Their site proudly proclaims; "J.P. Morgan this month became the first U.S. bank to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional clients. We sat down with Umar Farooq, head of Digital Treasury Services and Blockchain, to find out more about the announcement and what it means for the future of payments"
Despite Jamie Damon’s disdain for Bitcoin, JPM Coin mimics Bitcoins behaviors by speeding up transactions between users. Although, it differs related to JPM Coin’s design; as it is a fiat-collateralized Stablecoin pegged to the US Dollar. This, correctly stated makes J.P. Morgan Chase the first major US bank to introduce its own digital coin for real-world usage.
The love of Blockchain blossoms…
CoinDesk Exclusive on Zether & Quorum
On May 28th 2019, J.P. Morgan Chase announced it’s “blockchain team has developed a privacy feature for ethereum-based blockchains, obscuring not only how much money is being sent but who is sending it.”
“Revealed exclusively to CoinDesk, JPMorgan has built an extension to the Zether protocol, a fully decentralized, cryptographic protocol for confidential payments, compatible with ethereum and other smart contract platforms and designed to add a further layer of anonymity to transactions. The New York-based financial institution will open-source the extension Tuesday, and is likely to use it with Quorum, the bank’s homegrown, private version of ethereum.” Source.
JPM’s head of Quorum and crypto-assets strategy, Oli Harris explained what the extension does to CoinDesk:
“In the basic Zether, the account balances and the transfer accounts are concealed but the participants’ identities are not. So we have solved that. In our implementation, we provide a proof protocol for the anonymous extension in which the sender may hide herself and the transactions recipients in a larger group of parties."
CoinDesk’s exclusive interview with Harris pointed out; “Zether’s confidential payments architecture incorporates an account-based approach employed by ethereum, as opposed to the unspent transaction output, or UTXO-based approach, which the bitcoin client uses. The UTXO is also a feature of the privacy-oriented cryptocurrency zcash, which the original ZKP component of Quorum was based on. In this way, the extension could benefit not only users of Quorum, but also enterprises building on top of other ethereum variants — or, conceivably, businesses leveraging the public ethereum chain.”
Photo & Quote Source from CoinDesk
When we think about the community building on top of Quorum,” said Harris, “if anyone is looking to get an efficient trustless mechanism for trustless and anonymous payments in a consortium then that’s when it’s relevant. That’s why we wanted to open-source it back to the community so anyone can build on it further and continue enhancing it and potentially put it into their use cases as needed.
Harris said the extra dose of cryptography to obfuscate participant identities didn’t appear to have that effect with Zether, concluding:
The performance is quite good; we had done multiple iterations to improve it and we are doing the verification in solidity smart contracts. We’ll be including in our report the performance measurements for proving and verification.
The Race for First. Second. & Third.
J.P. Morgan is actually not the first bank to launch a Stablecoin, and it won't be the last.
Although, JPM Coin is making major headlines in relation to being backed by the top bank in America, it was not the first Stablecoin launched by a US bank.
The first was actually Signet, launched by Signature Bank on December 4, 2018, two months before J.P. Morgan Chase’s media release of their plans for a digital currency.
With all the Libra Stablecoin talk from Facebook and the Calibra wallet app launching next year, Mark Zuckerberg announced partnership among the various companies signed up to invest around $10 million each in Libra. These include but are not limited to; Visa, Inc. (V) and Mastercard, Inc. (MA), PayPal Holdings, Inc. (PYPL), Uber Technologies, Inc. (UBER).
bes in 2018 states; “
Some 1.7 billion adults worldwide still don’t have access to a bank account, according to data released by the World Bank. The situation is slowly improving, however, with 1.2 billion people getting access to proper banking since 2011, including over half a billion people in the last three years alone.”
With these facts presented, federally recognized institutions, globally are deciding if a Stablecoin is going to be beneficial to their bank or not. Many are experimenting, as to not get left behind as the financial technology continues to grow.
Need to know more about Stablecoins?
I’ve written a lot on them…
Complete & Simple Guide to Understanding StableCoins here.
Asset-Collateralized coins, also known as, Fiat-Collateralized StableCoins found in my publication here.
I also covered Crypto-Collateralized StableCoins. That article can be viewed here.
Then switched things up a bit and visited the only Non-Collateralized StableCoin Category, Seigniorage Supply (Algorithmic) StableCoin Model. Enjoy the description of the futuristic currency model here.
Next? A simple to understand category among a Asset-Collateralized group; Metal-Collateralized Stablecoins found here, with a long list of promising projects.
Lastly, combining asset backed and non collateralized crypto’s, we have our Hybrid StableCoin Model Category. View this here.
If you’d like to learn how to “get ahead” with your newfound StableCoin knowledge, visit my very last part of my Ebook here. “A Guide to Using Stablecoins to Increase & Protect Your Assets.”
Tell me what you think.
What am I missing? What would you add? What’s your personal opinion on StableCoins?
I’d love to professionally discuss, collaborate and connect with you all. Would love any feedback, positive and negative; as I’m only here to improve and educate myself/others.