JPMorgan, one of the biggest banks in the world, has now announced that it has launched a brand new cryptocurrency called the "JPM Coin." The announcement came as a surprise for most given how much the value of cryptocurrencies, particularly the Bitcoin, have fallen over the past few months. According to the company, they have already successfully run tests on their digital currency and it is now apparently ready for public use.
Similar to most cryptocurrencies, the JPM Coin will be based on the current blockchain technology, which allows for fast and secure transfer of payments and funds from anywhere in the world. Blockchain transactions are immensely cheaper and more secure than other types of online financial transfers.
According to JPMorgan, the value of their digital coin will be pegged to the US dollar. One coin will basically be equal to US$1. Most of the other cryptocurrencies that are pegged to other fiat currencies are known as "stable coins," which are still subject to the fluctuations of the currency they are set on.
According to the bank's digital treasury services head, the new coin will allow for near instantaneous transfers of money, greatly reducing the standard settlement times. JPMorgan reportedly also has plans to extend to other currencies, but for the meantime, they will be focusing on the US dollar.
Up to this day, regulators are still hesitant to fully accept the new technology. JPMorgan apparently agrees with this as it has mentioned that cryptocurrency technology is still a prototype and hasn't really fully matured. The value of Bitcoins and other cryptocurrencies ballooned to ridiculous amounts last year, with the bitcoin almost breaking the US$19,000 mark. Its value quickly dove down after the hype was over in the months that followed. The value of a single Bitcoin now stands at around US$3,500, as of this writing.
JPMorgan's Chief Executive Officer, Jamie Dimon, mentioned back in 2017 that he thought that Bitcoins and cryptocurrency, in general, was nothing more than a "fraud." The CEO later retracted his comments a few months later. JPMorgan as a whole apparently did not agree with its CEO viewpoint on the matter as they mentioned in their latest statement that they still believed in the potential of the technology for as long as it is properly regulated.
Over the past few months, JPMorgan's stance on cryptocurrencies has varied. The company published skeptical reports on the benefits of blockchain technology and what it could do to the financial industry. They did acknowledge that the core concept of the technology may provide some improvements to the current financial system. This included the automation of the relatively slow global banking processes and financial transfers.
