JPMorgan Chase’s highly touted stablecoin JPM Coin is unlikely to directly compete with Ripple’s XRP. But things can change.
That’s according to a report published by crypto exchange Binance’s research arm. This notes that “JPM Coin and the Ripple ecosystem are currently focusing on improving different aspects of traditional finance. Minimal direct competition is expected between the two in the near-term, though this could change depending on how JPM Coin develops to venture out of its current closed network.”
Do you remember the first time?
As the report notes, JPM Coin marks the first experiment of a new type of stablecoin that would rely on private blockchains, marking a transition from a interest-collecting business model to one that is targeted at improving internal processes (e.g. clearing and settlement).
Using the Quorum blockchain, the model could serve as a framework for other financial institutions to issue their own stablecoins. In a similar fashion to tokens created using the ERC-20 standard (built on the Ethereum blockchain), financial institutions could use and issue a wide range of branded stablecoins backed by various fiat currencies.
While JPM Coin does have the potential to materially impact traditional financial services (related to institutional client use cases such as clearing and settlement), it will not displace liquid, publicly traded stablecoins in the near-term given its private, permissioned structure, the report adds.
“Should this pilot project prove successful as a model for driving institutional adoption of private blockchains, it may be an intermediate stepping stone for crypto mass adoption as clients move toward private distributed ledgers backed by technology providers of enterprise white label solutions; however, a global decentralised economy will not appear overnight with everyone running on public blockchains,” Binance reckons.
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