Leading crypto exchange Binance’s research arm published an analysis of JPMorgan’s recently announced stablecoin, JPM Coin. Published earlier today by Binance Research, the study argues that JPM coin offers “minimal direct competition” to Ripple’s XRP in the short term.
Two weeks ago, JP Morgan Chase announced they would launch their own stablecoin — a token backed one to one by a national currency, in this case, the U.S. dollar — that would be used to increase speed and efficiency of settlements across three of its operations, with plans to expand to more.
While many companies have have either launched or are developing their own stablecoin — Gemini and Facebook, respectively — JPM Coin is the first of its kind to use private blockchains (in this case Quorum, a fork of the public Ethereum blockchain), with the aim of improving internal processes, as opposed to collecting interest through lending collateral, as is the goal of many stablecoins.
But with respect to any competition with Ripple, the Binance Research study notes:
“JPM Coin and the Ripple ecosystem are currently focusing on improving different aspects of traditional finance. Minimal direct competition is expected between the two in the near term…”
In fact, the study claims JPM coin could actually help Ripple’s initiatives — if JPM’s pilot program successfully clears the way for institutions to adopt private blockchains, it might actually serve as “an intermediate stepping stone for crypto mass adoption as clients move toward distributed ledgers backed by technology providers of enterprise whitelabel solutions.”
In terms of competing with publicly traded stable coins, like Gemini’s Gemini Dollar (GUSD), the study also found that JPM would have little impact on their success:
“Large banks and financial institutions […] have a distinct set of advantages in issuing fiat-collateralized stablecoins, but these offerings will not displace liquid, publicly traded stablecoins in the near-term given their closed ecosystems built on private blockchains.”
While the study claims the JPM and Ripple are not competing right now, it does offer the caveat that “this could change depending on how JPM Coin develops to venture out of its current closed network.”
Shortly after JP Morgan’s announcement of JPM coin, Ripple CEO Brad Garlinghouse claimed the token “missed the point” of crypto.