The CEO of San Francisco blockchain startup Ripple, Brad Garlinghouse, offered praise to JP Morgan Chase on March 6 for developing its own stablecoin, before questioning its usefulness and doubting the product’s possibility of adoption by other banks.
Garlinghouse, in a fireside chat at Chamber of Digital Commerce’s D.C. Blockchain Summit in Washington, said that he believes it is “great” to have primary financial players like JP Morgan “leaning in.”
However, he immediately added:
“That’s the only nice thing I’m going to say about this.”
Without a doubt, Garlinghouse, whose own firm has been seeking financial institutions to utilize its digital ledger technology (DLT) for payments—as well as products that employ the use of XRP—was quick to cast out a doubt on the future of the recently announced JPM Coin.
Garlinghouse, at another conference last week, mentioned, “This guy from Morgan Stanley was interviewing me, I said ‘So, is Morgan Stanley going to use the JPM Coin?’ And he said ‘probably not.’ So, well is Citi going to use the JPM Coin? Is BBVA? Is PNC? And the answer is no.”
Therefore, as Garlinghouse suggested, a bank developing its own stablecoin risks recreating the actual problems that DLT tries to solve.
“So, does that mean we’re going to have all these different coins? Are we back to where we are with lack of interoperability? I don’t get it,” he added.
Garlinghouse even began to sound like a blockchain critic when he asked what’s the point of tokenizing fiat currency when it is still on the books of a single entity.
“If you give them a dollar for deposits, they’ll give you a JPM Coin that you can then move within the JPM ledger. Wait a minute, just use the dollar!” he stated. “I don’t understand. If you’re just moving within the JPM ledger, and it has to be dollar-to-dollar, one-to-one backing, I don’t understand what problem that solves.”
He concluded his comments on a more diplomatic manner, however, saying:
“Now, back to my first answer, if it solves the first [problem] of JPM leaning into crypto, yay. That’s all I got.”