JPMorgan's Digital Asset Falls Short, Says Ripple CEO

According to a recent tweet by Ripple (XRP) CEO Brad Garlinghouse, the newly-announced JPM Coin, created by banking giant JPMorgan Chase, fails to align with the central purpose of cryptocurrency. Garlinghouse believes that introducing a closed network in the present day is akin to launching AOL after Netscape's IPO, emphasizing that bank coins do not provide an adequate solution.

JPMorgan's Digital Asset Misses the Mark, Says Ripple CEO

February 14, 2023 - New York City - Ripple CEO Brad Garlinghouse has expressed skepticism about the recent announcement of JPMorgan Chase's digital asset, JPM Coin, claiming that it "misses the point" of cryptocurrency.

In a tweet published on February 14, Garlinghouse stated: "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."

Garlinghouse's comments echo a previous article he authored two years ago, in which he critiqued the prospects of proprietary bank-issued digital coins, which he refers to as "bank coins." In that article, Garlinghouse argued that such projects are misguided and would ultimately lead to "an even more fragmented currency landscape than what we have today."

"If banks of different digital asset groups want to settle trades with one another, they’ll have to make markets between their unique digital assets or trade between their digital assets and a common fiat currency. What a mess!" Garlinghouse wrote.

Notably, JPMorgan has stated that JMP Coin will initially be used to facilitate international settlements for major corporations, with the aim of expediting transactions that currently take a day or longer using existing options such as SWIFT. This is a similar application area to that of Ripple, which has openly stated its ambition to replace SWIFT's global interbank network.

In fact, Garlinghouse recently remarked that "what we are doing on a day-to-day basis is in fact taking over SWIFT."

Industry figures cited in a Bloomberg article suggest that JMP Coin poses a potential threat to Ripple by encroaching on its core market: cross-border payments and remittances for banks and enterprises.

One expert noted that "JPM’s project is much more evolutionary than revolutionary — it is utilizing a private, permissioned blockchain technology called Quorum, which is much closer to a Google Sheet than a Bitcoin. The project is clearly competing directly with Ripple Labs and their centralized cryptocurrency XRP."

Furthermore, unlike Ripple, JPMorgan Chase has designed JMP Coin as a stablecoin pegged to the U.S. dollar, which some commentators believe could make it more attractive to financial institutions that may be hesitant to use a volatile unit of exchange for settlement and payments.

Garlinghouse's skepticism about JPM Coin is particularly notable given that JPMorgan Chase CEO Jamie Dimon has been a vocal critic of Bitcoin, once famously dismissing it as a "fraud." Dimon later softened his stance in private comments to Cointelegraph at the World Economic Forum last year.

The announcement of JPM Coin represents a significant shift in the banking industry's attitude towards cryptocurrency, but Ripple's CEO believes that bank-issued digital assets ultimately miss the mark in terms of the true potential and purpose of cryptocurrency.