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JPM Coin cryptocurrency and global financial markets

02/15/2019
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One of the largest financial holdings, JPMorgan Chase, will soon begin testing its own JPM Coin cryptocurrency. It will initially be used for cross-border payments. The total turnover of the banking group is more than $ 6 trillion per day.

Why JPM Coin cryptocurrency is needed

Over the coming months, JPMorgan Chase will launch a test of using cryptocurrency to make payments between counterparties. At the same time, the head of the bank’s core department, Umar Farouk, stated that he sees at once three potentially interesting areas for the use of tokens:

  • international payments;
  • exchange trading in securities;
  • replacement of fiat money.

Issuing of own stablebcoins will allow the credit institution to get a huge income. The JPM Coin cryptocurrency operation in the blockchain is 90% cheaper than a transaction in the traditional payment system. Moreover, the time of the transaction is reduced by an order of magnitude.

Through the use of blockchain technology, there is no need to confirm the operation. Blockchain protects data from unauthorized changes, which allows transactions with significant savings in time and computing power.

When conducting operations with securities, there is a minimization of the time gap in the calculations, which significantly reduces the risks. Replacing the e-dollar with a stablecoin reduces the debt obligations of a credit institution. At the same time, in global financial markets, cryptocurrency successfully replaces fiat money.

How JPMorgan Chase was coming up to JPM Coin

In this news, the very fact that the ninth largest company in the world has announced the transition to blockchain is interesting. In the summer of 2017, the head of JPMorgan, James Dimon, announced Bitcoin as a big bubble. Then he made a promise to dismiss any of his employee, who recommended the client to invest in cryptocurrency.

In September 2017, James Dimon said that cryptocurrency transactions were contrary to the rules of JPMorgan Chase. He said that tokens were more convenient than dollars only for drug dealers from Colombia or Venezuela.

However, in early 2018, the head of the Daimon expressed regret over these words. At the same time, he added that he had not not considered cryptocurrencies to be anything significant for global financial markets and a private investor. And was wrong again. After that, he chose not to make statements against the blockchain technology, but transfer this right to his subordinates.

In February 2019, JPMorgan analyst Nicolao Panigirtzoglu said that Bitcoin had gone through a bubble phase and looked like a reliable asset. Against this background, information about the emergence of JPM Coin cryptocurrency looks quite logical.

Cryptocurrencies as the future of global financial markets

The blockchain technology allows you to change the idea of finances radically. Not only JPMorgan are going to switch to tokens in international payments. Back in 2016, Mitsubishi UFJ Financial Group (MUFG) spoke about the plans to transfer payments to tokens. In February 2019, the launch of the system was announced in the first half of 2020.

It is noteworthy that MUFG is the second largest bank in terms of capitalization. It owns a 22% of securities in Morgan Stanley. That is, it can be stated that the global financial markets believed in cryptocurrencies and blockchains. Against this background, information about JPM Coin has become just another link in a huge chain.

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