JPM Coin and Ripple’s XRP: “Minimal Direct Competition,” According to Binance Research

An uproar of conflicting opinions has arisen among crypto community members over JP Morgan Chase’s JPM Coin being a direct competitor with Ripple’s XRP token. There are those who say Ripple’s XRP token is doomed, while others insist JPM Coin doesn’t stand a chance.

A light shines on this debate from the research arm of the world’s top crypto exchange, Binance, who published an analysis of JP Morgan’s stablecoin and concluded that the coin will bring “minimal direct competition” to Ripple’s XRP token in the near future.

Binance Research on JPM Coin

As previously reported by IIB, JPM Coin is a stablecoin backed 1:1 by the bank’s USD reserves, and will initially be used for blockchain settlements of payments within JP Morgan Chase’s operations.

According to Umar Farooq, project lead for JPM’s blockchain focus, JPM Coin may have additional use cases in the future when blockchain becomes mainstream. But for the near term, its use cases are limited.

Binance Research notes that JPM Coin’s initial use case is for blockchain settlements and value transfer between financial institutions. The analysis points out that JPM Coin runs on the permissioned Quorum blockchain network—a fork of the public Ethereum (ETH) blockchain.

JPM Coin and Ripple’s XRP: “Minimal Direct Competition”

Regarding JPM Coin’s initial use for inter-bank settlement, Binance Research explains that for now, the coin is unlikely to directly compete with Ripple’s XRP token, as XRP aims to serve as a multi-bank mediator currency while the JPM Coin is restricted to internal clients only.

As put by Binance Research:

“While JPM Coin does have significant worldwide reach based on J.P. Morgan’s existing client base, the network is currently restricted to these internal clients only. It is highly unlikely that clients of a large competing bank such as Citigroup will be able to settle transactions using JPM Coin, especially if a Citigroup Coin is released in the near future.”

Overall, the analysis concludes that for the short term, the two projects appear to have different focuses and potential applications, meaning there is minimal direct competition between the two.

Binance Research further states that should JPM Coin extends beyond its existing closed network in the future, that’s when the debate can resume as to how the two cryptocurrencies are in competition.

As stated in the analysis:

“While there is currently no direct overlap on the functionality of the two initiatives [JPM Coin and XRP], future developments on the reach of JPM Coin outside of its existing closed network will determine to what degree Ripple and JPM Coin will compete.”

Do you think JPM Coin will be a threat to XRP in the future? Will other major banks launch their own cryptocurrencies to compete with JPM Coin? Let us know what you think in the comment section below.

1 Comment

  • Paul
    Posted March 26, 2019 12:52 pm 0Likes

    At the moment, no competition. But like the article states there is a possibility that other financial institutions will bring out there own blockchain solutionto the table. It is only a matter of time.

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