Category Archives: JPM Coin

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Wells Fargo Piloting US Dollar Backed Stablecoin

Wells Fargo, a major United States bank with USD 1.9 trillion of assets, has announced that they will be piloting a US Dollar backed stablecoin on a distributed ledger technology (DLT) platform. Specifically, Wells Fargo is utilizing R3’s Corda Enterprise technology.

Lisa Frazier, the head of the Innovation Group at Wells Fargo, says:

“We believe DLT holds promise for a variety of use cases, and we’re energized to take this significant step in applying the technology to banking in a material and scalable way. Wells Fargo Digital Cash has the potential to enable Wells Fargo to remove barriers to real-time financial interactions across multiple accounts in multiple marketplaces around the world.”

The new stablecoin will facilitate rapid cross-border payments in the Wells Fargo global network, and then the stablecoin can be exchanged locally or internationally among users. If this pilot is successful, the bank plans on launching additional DLT-based applications.

Wells Fargo is not the only bank piloting stablecoin technology. JPMorgan has launched JPM Coin which can be sent to over 300 banks within their network.

It is expected that the Wells Fargo pilot will start in 2020, and initially only use US dollars, but will eventually expand to other major global fiat currencies.

The point of using a stablecoin within a DLT, which is a form of blockchain technology, is that it simultaneously provides cryptographic security and transparency. Also, stablecoins can be sent instantly, which is faster than international fiat payment options.

 

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JP Morgan Blockchain to Have Privacy Feature

JP Morgan Blockchain to Have Privacy Feature

Finance Magnates has reported that Wall Street banking giant JP Morgan will be developing privacy features for its native blockchain transactions, and will likely add that to Quorum.

This is only the latest development in the blockchain ambitions of a bank that also launched its own native cryptocurrency dubbed JPM Coin in February, professed to have institutional interests in mind.

Accorting to reports, this privacy feature was already added to the Zether protocol and is designed to be added on to any blockchain based on Ethereum, be it private or public. Perhaps more surprisingly, the bank has also said that it will release the new extension with an open source license, hinting that it hopes to see adoption proliferate.

Zether was developed by fintech researchers and academics as a payment mechanism that would work with any smart contract platform to add an anonymous layer to digital currency transactions. Apparently, the bank’s protocol will now hide the transaction amount as well as sender identity. Quorum head Oli Harris said:

“In the basic Zether, the account balances and the transfer amounts are concealed but the participants’ identities are not necessarily concealed. 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.”

Harris added that the bank had future intentions to enter the industry of blockchain payments, and had already created ties with over 200 banks to use a distributed ledger to share financial data. He stressed that the new feature would not have an impact on existing protocol:

“… it’s more just an additional functionality that would build in. Of course, we are still very early days in terms of doing any detailed testing around performance and scalability in production networks.”

 

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What Makes This Bull Market Different

What Makes This Bitcoin Bull Different

For the past several months Bitcoin has been on the up, increasing its value by 50% and hitting its highest price so far in 2019. And alongside it, altcoins have been enjoying a significant market boost. With indicators suggesting a bull market is back for cryptocurrency, there are many promising factors that mark this run as different than the infamous rise and fall experienced by Bitcoin investors during late 2017, early 2018.

Here are some of the major changes in the cryptocurrency and blockchain space that bode well for Bitcoin and altcoin’s market prices:

Market maturity: Less ICOs, more major names entering blockchain

Initial coin offerings (ICOs) and other token sales exploded in the wake of the 2017 Bitcoin bull market as companies looked to get in on the increasingly lucrative cryptocurrency market. Unfortunately, a significant number of the projects raising funds in this way either failed to deliver on their promises to investors or never tried to do so in the first place. In 2017, an estimated 80% of ICOs were reportedly scams. Of course, the mistrust that this sparked negatively impacted the performance of the cryptocurrency market as fewer investors held faith in many altcoin projects.

Last year the bear market wiped out many of the projects that lacked substantial promise or were unequipped to carry out their plans. While there is still an abundance of ICOs being held, investor attention has dwindled due to a continued lack of credibility.

The blockchain market has matured far beyond start-ups holding dubious ICOs, with the technology now being utilized by some of the biggest, most trusted names in technology, logistics and retail this time around. Such major players include Microsoft, Walmart, Pepsico, and Luis Vuitton.

The rise of state-backed cryptocurrencies, stablecoins, and the JPMorgan Coin

Again, these three rising trends in the cryptocurrency space represent growing levels of trust, or support in the technology behind them at the very least. A significant number of central banks including that of Saudi Arabia and the UAE continue to explore the option of launching their own state-backed cryptocurrencies in a bid to lower remittance costs and provide an additional reserve for domestic payments.

Alongside the growing prominence of stablecoins, both appeal to “another kind of investor”, one seeking greater stability than that the cryptocurrency market could offer in 2017. Indeed, although the first stablecoin was launched in 2014 the concept did not gain great notoriety until last year.

JPM coin was launched in February 2019 as the first major US bank to create its own digital currency. Indeed, it can be considered to be the first ‘institutional’ cryptocurrency. This won’t appeal to a lot of established cryptocurrency investors, but it may well expand the market into a new audience.

A transforming market?

What these changes to the market show, along with growing support for cryptocurrencies among mainstream investors, is that the cryptocurrency market is appealing to a whole lot of investors it probably did not reach last time around; there are many ‘safer’ options in the market today.

It was perhaps not surprising to experience a market turndown last year while sub-standard blockchain projects collapsed. What is different and promising about the market today though is the additional seasoned professionals that have joined the industry.

As long as the blockchain industry can continue to avoid a stifling regulatory ceiling, it would seem to put the cryptocurrency market in a far stronger position for 2019.

 

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JPMorgan Coin Gets Blockchain Reboot

JPMorgan Coin Gets Blockchain Reboot

A report today claims that JPMorgan Chase has rebooted the underling blockchain of it its prototype cryptocurrency, JPM Coin, following six month long efforts from technologists in London, Singapore, and the US.

JP Morgan’s private version of the Ethereum blockchain, Quorum, has had an overhaul of its privacy features in an effort to make the technology suitable for use by a wider selection of firms. This ambition has also been pursued through JP Morgan’s partnership with Microsoft Azure, which Quorum head Oli Harris has said is also a stepping stone for offering a corporate spin-off of the software project.

The behind the scenes updates to Quorom have focused specifically on re-writing its privacy layer, Constellation, replacing its current language Haskell with Tessera. Tessera operates a similar design but is built in Java, making it more accessible for businesses to deploy.

Harris told CoinDesk the engineering collaboration between JPMorgan and Microsoft should enable the bank to focus on the potential business applications of the technology, while Microsoft can ”[deal] with a lot of heavy lifting.”

JPM coin was launched in February this year, with JPMorgan being the first major US bank to create its own digital currency.

 

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Major Banks at US Congress Meeting Express Guarded But Tolerant Views on Crypto

Major Banks at US Congress Meeting Express Guarded But Tolerant Views on Crypto

Bank CEOs assembled before the United States House of Representatives Financial Services Committee on 10 April to give their spin on banking’s status quo following the 2008 financial crisis, including the position of cryptocurrencies and blockchain.

Rep. Warren Davidson’s view was that blockchain had found its place in addressing cybersecurity and transforming outmoded financial systems, but felt that regulation was still dragging behind other jurisdictions where progressive measures were being introduced to facilitate the blockchain industry.

A less accusative view than expected was expressed by Jamie Dimon. The chairman and CEO of banking giant JPMorgan Chase suggested that the bank was “supportive of cryptocurrencies as long as they are properly controlled and regulated”. It was noted that Dimon was one one of cryptocurrencies greatest detractors at one time and with the recent issuance by JPMorgan of its JPM coin showed a markedly different view, given prior comments elsewhere. Dimon’s latest spin is that blockchain can work over time, although he still felt that there was “no value behind it (cryptocurrency)” other than what the next person pays.

JPM Coin is the first dollar-backed cryptocurrency from a major bank. It was announced by JP Morgan Chase in February, 2019 as an institution-to-institution service. A permissioned blockchain variant of Ethereum called Quorum is used as the distributed ledger platform.

The Chairman and CEO of the Bank of New York Mellon, Charles Scharf, voiced a guarded approach regarding cryptocurrency’s position in the global financial system, suggesting:

“Cryptocurrencies are very early in their existence. They are not significant today to speak of in terms of being used as a real currency to move value, and so we are actively thinking about what we want to do. One of the biggest issues that we have relates to any money laundering and KYC.”

 

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JPMorgan Inspired But Worried About China Fintech

JPMorgan Inspired But Worried About China Fintech

A recent expedition by JPMorgan Chase & Co executives to China to conduct business reconnaissance of their financial technology (fintech) has resulted in mixed feelings of inspiration and worry, according to the consumer bank’s CEO Jamie Dimon.

In a letter distributed to shareholders last week, Dimon outlined the vast progresses made by Chinese banking firms in fintech, claiming that the evidence had spurred top brass to act even quicker on innovation measures:

“It’s hard not to be both impressed and a little worried about the progress China has made [with artificial intelligence and fintech]… It made our management team even more motivated to move quickly.”

During the China trip, the team paid visits to companies that could open accounts almost immediately with machine learning, and firms that could pay out claims in a few ours with just smartphone images.
Dimon is a long-time advocate of investing in innovation, in 2017 dubbing technology “the greatest thing that has ever happened to mankind”. Bloomberg reported in February that the bank would boost its annual tech budget to USD 11 billion, including to research machine learning.
However, Dimon has not always taken kindly to cryptocurrency and blockchain, criticizing Bitcoin often in past yeas. He has seemingly changed his mind, backing blockchain last year. JPMorgan Chase itself has been stirring in the crypto scene, with its quiet launch of JPM Coin in February targeting institutions.

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JP Morgan Promotes “Faster, Cheaper” Blockchain Payments

JP Morgan Promotes “Faster, Cheaper” Blockchain Payments

A JP Morgan executive has taken the opportunity on camera to promote blockchain payment methods as ”faster and cheaper” than the traditional alternatives.

Ron Karpovich, Global Head of eCommerce Solutions at JPMorgan Chase, was interviewed by CNBC’s Squawk Box earlier today where he explained blockchain technology was capable of proving the same, if not better, services than traditional banks while requiring lower fees.

Karpovich added that he saw the technology gave opportunities for “more partnership [with traditional banks] instead of competition”.

The self-proclaimed ”specialist in Cross-Border Payments” added that he ultimately believes it is only matter of time before e-commerce customers begin using blockchain to make their payments, even though it may remain ”behind the scenes” and customers may not be aware of it.

JP Morgan’s own JPM Coin was defended by the executive who determined it did not necessarily make the company convert in favor of cryptocurrency at large.

”I think there’s a difference between trading a cryptocurrency that’s in the market that’s ubiquitous versus using the technology to enhance your payments infrastructure,” he said, reaffirming that the financial institution’s interest in blockchain was to make payments ”faster and cheaper.”

 

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EU-Regulated Bank Frick Launches DLT Markets for Institutional Investors

EU-Regulated Bank Frick Launches DLT Markets for Institutional Investors

One of the European leaders in blockchain banking, Bank Frick, announced last week that it will be starting up a subsidiary service to provide a secure environment for institutional investors to trade in digital assets.

The bank said it is introducing a digital asset marketplace dubbed DLT Markets with the regulatory properties of the traditional financial market. It will provide institutional investors with professional access to cryptocurrencies being traded on multiple exchanges.

CEO of DLT Markets Roger Wurzel said:

“We are creating a unique market offering for institutional investors in the area of the new digital token asset class. With our fully regulated platform, we are driving professionalism with regard to the trading of digital tokens and cryptocurrencies.”

This appears to be the second blockchain-related initiative of the bank, following the recently established Distributed Ventures AG – a subsidiary tasked with promoting and financing fintech and blockchain start-ups – the bank clearly wants a stake in the future digital assets market, as CEO of Bank Frick Edi Wögerer explains: “In establishing The DLT Markets AG, we are significantly building on our leading position in the area of regulated blockchain banking.”

Evidently, the digital asset ecosystem has become a gold rush for institutional investments and while regulatory framework and a secure custody solution may be holding some back, many financial service operators are seeking for ways to stake a place in the emerging market.

Bank Frick is a private bank based in Liechtenstein with a branch that operates in the UK. It has nearly two decades of financial service experiences offered to intermediaries such as fiduciaries, asset managers, payment service providers, and fintechs. Its services include custody of crypto assets, and as per the statement, the bank supports initial coin offerings. Earlier in February, it announced an official partnership with blockchain advisory AmaZix, as part of a drive towards mainstream adoption in blockchain banking services.

Many other financial institutions are participating in the blockchain economy.

Fidelity Investments, with over half a century’s worth of experience in the financial market, whose recent valuation was estimated to be worth USD 2.46 trillion in asset under management (AUM), has launched crypto subsidiary Fidelity Digital Asset Services to provide institutional grade crypto asset custody and cryptocurrency trading services. More so, a deadline has been set for March for the release of its Bitcoin custody solution.

Also, US investment bank JPMorgan recently launched its own JPM Coin, a digital coin backed by the US dollar meant for internal money settlements between its clients. Although it may have received many criticisms from crypto enthusiasts, the gesture remains one of clear certification that blockchain and its underlying asset classes are revolutionary to the traditional financial marketplace.

Last year, top cryptocurrency exchange Binance announced that it was adding a sub-account feature to attract institutional investors. US-centered crypto exchange Coinbase also launched its over-the-counter (OTC) trading service for institutional investors. And most recently, New York-based digital asset management firm Grayscale Investstment LLC reported an increase in the number of institutional investors making up 66% of its portfolio under management.

Certainly, it’s turning out to be a bouquet of institutional grade digital investment niche, and with so many to choose from, the industry will perhaps be the replacement venture to traditional finance as many have speculated it to be.

 

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Ripple’s Brad Garlinghouse Slates JPMorgan’s JPM Coin as Lacking Innovation

Wall Street banking giant JPMorgan’s announcement of its new stable coin JPM Coin, has Ripple’s boss Brad Garlinghouse criticizing its “closed network” lack of innovation.

JPMorgan says it sees potential in using digital coins to reduce risk and enable instant transfers, despite JPMorgan’s chief executive Jamie Dimon criticizing Bitcoin since it emerged as the industry’s flagship cryptocurrency.

The bank says it has always “believed in the potential of blockchain technology”. “We are supportive of cryptocurrencies as long as they are properly controlled and regulated,” says Umar Farooq, JPMorgan’s head of Digital Treasury Services and Blockchain. The new JPM coin will be transferable between client accounts at the bank, who will then be able to redeem them for US dollars pegged at parity with the coin.

With the arrival of JPM, the volatility of Ripple’s XRP is brought into question and certainly draws obvious comparisons, to which Garlinghouse has reacted by saying there is nothing innovative about JPMorgan’s final arrival into the cryptocurrency space, arguing:

“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.”

His comments very much echo the sentiments illustrated in an article he wrote two years ago called “The Case Against BankCoin,” in which he argued that banks should be using XRP as the obvious independent digital asset, claiming they offered “universality” which bank coins did not:

“It goes back to the fundamentals of what makes digital assets unique and special – they’re universal currencies, meaning anyone can use them as units of value anywhere in the world. That universality gives digital assets global reach and the ability to settle much faster than traditional assets.”

Clearly, Ripple’s executives would argue that users of XRP also has the added option to speculate, holding on to the currency in the hope of trading later at a higher value; compared to bank coins which will only have a fixed settlement value based on parity with the US dollar.

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JPMorgan Introduces Its Own Digital Coin With Institutions in Mind

JPMorgan Introduces Its Own Digital Coin with Institutions in Mind

Major US-based multinational investment bank JPMorgan announced yesterday that it has launched a digital coin that will be backed by the US dollar.

A major breakthrough for cryptocurrencies which had for a long time been blighted in some circles as being untrustworthy, or so would some think. As a matter of fact, JPMorgan was among those in 2017 who ridiculed cryptocurrency and specifically called Bitcoin a fraud. Although its perspective on the subject of blockchain industry as well as properly controlled and regulated cryptocurrencies was that it held promise. Now, it stands as the first major US bank creating a digital coin and one among others in the traditional banking industry to create a real-world application of blockchain technology.

Consequently, this development has aroused some controversial sentiments within the crypto community. According to MarketWatch, Jerry Brito – executive director at Coin Center told the news outlet that the JPM coin isn’t a cryptocurrency but an in-house-built payment system. The bank did clarify on the differences between its digital coin and cryptocurrencies, however, it is a popular sentiment that any product built on the blockchain is assumed to come with the tag ‘cryptocurrency’.

As explained on the bank’s website, it appears that the JPM coin isn’t a legal tender, but a digital coin backed by the US dollar – not a stablecoin either – stored in designated accounts of JPMorgan Chase. The bank said that when one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of US dollars, reducing the typical settlement time.

The JPM coin will only be used between its institutional clients as the core purpose of the coin is to save time for inter-bank/institution settlements, leveraging the robustness of the blockchain as opposed to legacy systems of money transfers. Accordingly, the coin will not be available to individuals, however, the bank says that the rippling effect in the efficiency of money transfer will confer certain benefits to individuals.

The bank may not stop at the digital coin alone, it said in its news release that with respect to its other businesses like custody or clearing and settlement, “it’s still too early to assess the ultimate impact of blockchain,” and it intends to further explore areas of applicability as it works with clients around the world. Perhaps, it may join the list of financial institutions proposing to offer custody solutions in an attempt to cater to institutional investors willing to join the crypto derivative market once the system is well regulated.

Blockchain-related trends in the banking industry have been growing of late with expanding use cases specific to interfacing with the technology to facilitate money transfers between financial institutions. As reported in December last year, Signature Bank’s Signet may have been the first regulator-approved blockchain-based payment system developed by a bank. It was designed to eliminate third parties and process payments faster between the bank’s clients.

Saudi Arabia and the UAE have been discussing plans on developing a blockchain-based cross-border payment system for inter-bank relations.

Moreover, the subject of a state-backed central bank digital currency (CBDC) has been frequently discussed in many banking circles. However, the views on such development have been rather polarized. Perhaps, this step made by JPMorgan will further facilitate the adoption of different blockchain use cases for other banks as they race for inclusion into the emerging market.

 

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