- JPMorgan has announced that it will run the first real world test of its JPM Coin this week
- The bank’s in-house digital currency was announced in February 2019
- Success could see JPM Coin kill off the likes of XRP
JPMorgan will test its in-house cryptocurrency JPM Coin this week as it moves a step closer to widespread use. The inaugural transfers will take the form of a series of cross-border transactions by an unnamed client, marking 18 months since the bank announced JPM Coin, and potentially ending the use case of bank-focused cryptocurrencies like XRP.
JPMorgan Pioneering Inter-bank Blockchain Payments
News of the inaugural transactions was broken by CNBC during an interview with Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, who revealed that JPM Coin was about to be used “by a large technology client to send payments around the world”. In doing so, JPMorgan has become the first bank to create and operate its own cryptocurrency, six years after the bank’s CEO Jamie Dimon first lauded the commercial potential of blockchain technology.
JPM Coin runs on the Quorum blockchain, the private, centralized offshoot of the Ethereum blockchain, which was bought by ConsenSys in August. Speaking to CNBD, Georgakopoulos offered an insight into the thinking behind JPM Coin:
We are launching JPM Coin because we believe we are shifting to a period of commercialization of those technologies (blockchain and digital currencies), moving from research and development to something that can become a real business.
JPM Coin Puts XRP Under Threat
The emergence of the coin into the real world will be of concern to banking-focused coins like XRP, with JPMorgan’s Interbank Information Network (IIN), which has over 350 members, likely to use the token to transact between themselves. Were the coin to take off it could be used outside of the IIN ecosystem, with JPMorgan’s network of banks able to deal a potential death blow to the XRP use case.
And what a shame that would be.