When JP Morgan Chase announced that they were getting ready to create a stablecoin, the crypto world seemed to explode. However, less than a week after the announcement by the bank, Ripple native token XRP, was able to perform strong.
This is because the stablecoin is being dubbed as a rival to Ripple as it aims to facilitate client transactions. Even though most cryptocurrencies got a significant boost in price on 18th Feb, XRP has been able to continue an increase in value in spite of what has been a hectic week for the token.
Two weeks ago it was announced to us as a Valentine's gift that JP Morgan would be designing a cryptocurrency in order to improve the efficiency of client transactions. JP Morgan is one of the biggest and most well known Wall Street financial organisations in the world and so the announcement that they would be creating a cryptocurrency is extremely bullish news.
The coin will be called JPM Coin and will be classed as a stablecoin as the value of the coin will be tethered to the US dollar.
According to the banks head of Digital Treasury Services and Blockchain, Umar Farooq, the new cryptocurrency will work like so:
“When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.”
It didn’t take long for members of the community to see the similarities between the JPM Coin and Ripple’s xRapid Service. The San Francisco based blockchain firm has had many financial institutions in their crosshairs over the past 12 months to get them on board with the xRapid service.
In a similar way to the XRP token, the JPM Coin serves as liquidity for the xRapid service. For those that don’t know, xRapid is a product which significantly cuts down on transactions fees and waits times when sending money to different borders.
Some community members claim that the announcement of the JPM Coin could be a market tactic which is timed at the same time as the recent industry development surrounding the approval of a Bitcoin ETF.
The Bitcoin ETF seems to be able to become a reality at some point this year and institutional investors are being forced to find their ground on the crazy world that is cryptocurrency. With JP Morgan being such a massive bank, this would mean giving the appearance of forward thinking even if the JPM Coin is more theoretical.