JPMorgan Chase Test Runs First US Bank Cryptocurrency, the ‘JPM Coin’

JPMorgan Chase Test Runs First US Bank Cryptocurrency, the ‘JPM Coin’

JPMorgan Chase & Co., the largest bank in America, unfurls the first bank-backed cryptocurrency called the ‘JPM Coin’ in a trial that will begin in a few months. The coin, created by the bank’s engineers for instantaneous settlements, will only be available for institutional clients

JPMorgan is gearing for a move to the blockchain, where money can be transferred lightning speed, away from the slowness of wire transfers. This test run will be the first real-world use of a cryptocurrency issued by a bank.

Umar Farooq, JPMorgan’s chief of blockchain-related projects, tells CNBC that there are unlimited applications for the technology. ‘Anything, where you have a distributed ledger which involves corporations or institutions, can use this,’ he quips.

JPM Coin Works like Stablecoins

After depositing fiat dollars with the bank, institutional clients will be issued the JPM Coin. Each digital coin is equivalent to one US dollar. Once a client uses it to make a security purchase or carries out payment on the blockchain, the bank will burn the coins and reimburse the client with the corresponding amount in dollars.

But in contrast to other stablecoins and cryptocurrencies, the use of the JPM Coin is limited to the bank’s institutional clients who go through regulatory checks.

Instantaneous Settlement for Big-Time Clients

Money sloshes back and forth all over the world in a large enterprise. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it.’

Umar Farooq, Chief of blockchain-related projects at JPMorgan Chase & Co.

According to Farooq, the JPM Coin satisfies various needs of its big-money clients. Corporations making cross-border payments through SWIFT wire transfers, those who use the bank’s treasury services, and securities transactions can benefit from the system they are testing. Through the crypto coin, international payments can be settled in real-time, any day.

Related news

Stablecoin Adoption: 90% Of OTC Flow in Asia Happens in Stablecoins

Stablecoins play a crucial role in cryptocurrency trading and investing. By introducing a blend of stability found in fiat currencies and independence inherent in blockchain systems, stablecoins act as conduits where investors and traders can easily move their funds in and out of cryptocurrencies. They are so vital to cryptocurrency trading that 90% of crypto outflows in Asia are in stablecoins according to Jason Choi, an investor and writer. Whales Care about Liquidity Taking to Twitter, Jason went on and added that whales, individuals who control a huge chunk of any cryptocurrency, care more about liquidity and the number of exchanges that support their preferred stablecoin, not proof of reserves or governance and other metrics that project supporters use to gauge progress and the level of decentralization. ~90% of OTC flow in Asia happens in stablecoin (Tether for China, TUSD for Korea etc) The whales don’t care about governance, proof of reserves etc – only liquidity, how many brokers accept their stablecoin of choice and whether it helps them move money easier than thru banks. https://t.co/tFDwEA5bW4 — Jason Choi (@mrjasonchoi) November 18, 2019 Liquidity is paramount. An analysis by Willy Woo, an on-chain analyst, revealed that over the 4,500 cryptocurrency projects listed by CoinMarketCap, a coin tracker and aggregator, only one percent are liquid. Coinmarketcap lists 4978 coins. Here's the top 50 by volume. Below the top 40 doesn't even register i.e. 4938 coins are illiquid. Investors want liquidity at entry and liquidity on exit. Very few coins have credible liquidity to be good investments. pic.twitter.com/3kXgn3NWjV — Willy Woo (@woonomic) November 13, 2019 99% of these projects, it emerges, are struggling with liquidity. They are sparsely listed on different cryptocurrency exchanges presenting a problem to investors and traders who wish to opt out by liquidating those tokens and coins. Meanwhile, Bitcoin (BTC), the pioneer cryptocurrency, is the world’s most liquid as it is supported by almost all exchanges where it acts as base and is easily convertible into fiat of various denominations. The Convenience of Stablecoins For all they bring on the table, stablecoins are attractive for their price stability. Pegged against fiat currencies, one of the world’s most liquid stablecoins, Tether (USDT) is listed on leading cryptocurrency exchanges including Binance and Bitfinex. Overtime, stablecoins have evolved into preferred store of value, acting as a medium of exchange, especially during times of market uncertainty. When prices of digital assets plunge, traders can trade its derivatives and short sell, riding the bear trend. Alternatively, in spot trading, they can convert their holdings into stablecoins as USDT, TrueUSD or any other stablecoin as a shield. Chinese Importers Resorting to USDT In late July, it was reported that Chinese merchants were converting cash for Bitcoin (BTC) and USDT to the tune of $3 million a day via OTC desks in Russia. Most of these conversions were in USDT–at 80%, and the rest-20%, in BTC. An OTC dealer, Roman Dobrynin, told reporters that USDT was convenient for Chinese traders and that China was overly reliant on USDT: “As the price was going down, tether became much more convenient to use. China is totally reliant on USDT, they trust in it a lot, plus it’s very liquid.” The post Stablecoin Adoption: 90% Of OTC Flow in Asia Happens in Stablecoins appeared first on Coingape.
CoinGape

Tether Introduces New Gold-Backed Stable Coin

The crypto world is seeing a huge influx of gold-backed stable currencies, and now Tether is adding a new one to the mix. Tether Is Getting Involved in Gold The world could see the new “Tether Gold” cryptocurrency by the time Christmas rolls around this year. What is it about Christmas that seems to bring either great renown or floor-scraping gutter waves to the crypto space? Remember in 2017 during the holiday season when the number one cryptocurrency by market cap (we’re talking about bitcoin) reached its all-time high of nearly $20,000? Those memories are less fresh than ones of bitcoin during Christmas the following year, when it was trading for a measly $3,500. Either way, Paolo Ardoino – the chief technology officer for Bitfinex and Tether – is very excited about the prospects Tether Gold can bring to the digital money space. He comments: Current macro-finance uncertainty brings the need of traditional instruments to hedge risk of our customers, especially in the crypto industry. Gold has been, historically, an important asset for risk contingency. Tether’s new product emerges at a time when many other crypto-based platforms seem to be getting the same idea. For example, Live Bitcoin News recently reported on Coin Shares – a company that dabbles in stable currencies – and its plans for a new gold-backed stable coin. Danny Masters – chairman of the London-based company – explained in a statement: Gold tokens are appealing due to a confluence of events: weakening real interest rates and weakening national currencies combined with increasing regulatory clarity around non-security tokens and the natural appeal of gold to investors. Bitcoin itself has often been compared with gold and is affectionately referred to as “digital gold” by several members of the cryptocurrency community including David Marcus, the head of Facebook’s blockchain division and the main developer behind Libra. Comparisons are made in that bitcoin and gold often work to downplay some of the economic tension that can affect commodities or national forms of fiat currencies. Economic strife isn’t enough to make their values go down; thus, both products can be great when it comes to maintaining one’s wealth. At press time, there are roughly 20 different gold-backed tokens currently existing within the cryptocurrency space. Another example is Paxos Gold, introduced by Paxos last September. The company is a regulated financial institution that seeks to create a “global, frictionless economy” according to its website. We Need Better Products Bitfinex could allegedly be in the market for new products, which explains the development of the new token. It is reported that the platform’s trading volume on several coins has been down by more than ten percent since June. Nic Carter – co-founder of Coin Metrics – says: This could be a function of Binance’s launch of futures… or just wariness of regulators and their ongoing back and forth with the exchange. The post Tether Introduces New Gold-Backed Stable Coin appeared first on Live Bitcoin News.
Live Bitcoin News

USA To Enforce Strict AML Rules For Cryptocurrencies, FinCEN Director Says

The cryptocurrency market has spiked the interest from the media and regulators over the last several years. Its actual lack of established regulations leads to numerous alleged criminal activities, and the U.S. government is reportedly preparing to act against potential money-laundering schemes. The director of the Financial Crimes Enforcement Network (FinCEN), Kenneth Blanco, has recently said that the country is looking for a way to introduce more strict enforcements on several cryptocurrency-related types of businesses. It’s called the “travel rule,” and it would still require all crypto exchanges to verify the identities of each customer (a process known as KYC – know your customer). However, they would also need to identify the original parties and beneficiaries of transfers for over $3,000, and that information will be provided to counterparties, if applicable. Blanco spoke last Friday at a conference in New York, where he added: “It [travel rule] applies to convertible virtual currencies, and we expect that you will comply period. That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.” Apparently, FinCEN introduced the travel rule back in 1996. Its original purpose was also anti-money laundering (AML), and it covered all financial institutions in the United States at that time. In 2013, the rule was updated to include all cryptocurrencies, as well. Despite the above, the CEO of CipherTrace, a blockchain-based forensics company, purportedly said that digital assets have never been considered as money, so the travel rule should not be including them. It’s also worth noting that the U.S. Financial Action Task Force (FATF) had published a set of guidelines for cryptocurrency exchanges to follow. All exchanges have until June 2020 to adjust and start complying, as well. Cryptocurrency’s Other Side While Bitcoin and other cryptocurrencies have been used mostly for beneficial purposes, they have also been implicated in alleged criminal activities. On the other side stands the argument that cash is still the most used method for money laundering, as per research conducted by the EU. It was also supported by Yaya Fanusie, the director of analysis for the Foundation for Defense of Democracies Center on Sanctions and Illicit Finance. When asked about the most widely adopted form of money laundering, he said: “cold cash is still king.” The post USA To Enforce Strict AML Rules For Cryptocurrencies, FinCEN Director Says appeared first on CryptoPotato.
CryptoPotato

Hot news

By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.