As the great Oscar Wilde once said, “Imitation is the sincerest form of flattery,” a proverb that rings true to this day across many different areas, including the history of entrepreneurship, where large-scale corporations have the proclivity to either mimic novel business models of their less prominent rivals or completely buy them off altogether, in an attempt to eradicate competition.
As it would appear, JP Morgan is now taking a leaf out of the crypto industry’s book, as it has now adopted a concept first popularized by multiple blockchain startups, repackaged it and called it its own.
For the past week, the largest bank in the U.S. has been making headlines after recently disclosing plans of launching what it touted would soon become the first US bank-backed cryptocurrency for settling payment transactions, something that another smaller New York-based financial institution Signature Bank has actually been doing for quite some time now, not to mention the slew of other blockchain firms that have originally made the idea of facilitating blockchain-based cross-border payments famous, most notably Ripple Labs.
Banks were obviously never going to use XRP for settlements and enrich Ripple Inc (who owns more than half of all XRP). They would rather enrich themselves instead!
Kudos to JPM for being first. They are going to wipe the floor with Ripple. https://t.co/Jkfkvr7BnE
— Tushar Jain (@TusharJain_) February 14, 2019
Dubbed the JPM coin, the bank’s new proprietary stablecoin designed to run on an Ethereum-derivative blockchain Quorum borrows heavily from the technology behind the XRP token, combining the reliability of traditional interbank settlement system and the efficiency of blockchain technology in facilitating cross-border payments transactions, or at least in theory.
JP Morgan’s dollar-pegged stablecoin aims to appeal to the greater public by highlighting its ability to be transferable between clients without the high volatility commonly associated with other digital currencies.
As the bank explained in its previous announcement:
“Exchanging value, such as money, between different parties over a blockchain requires a digital currency, so we created the JPM Coin.”
While most in the crypto and blockchain community probably view the Wall Street titan’s move as a blatant imitation of what the budding industry has originally conceptualized, Ripple CEO Brad Garlinghouse appears unfazed by what would most likely become one of the industry’s major entrant.
In a recent tweet posted February 15, Garlinghouse was quick to scrutinize how JPMorgan’s whole crypto project “misses the point,” stating:
As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer https://t.co/39EAiSJwAz https://t.co/e7t7iz7h21
— Brad Garlinghouse (@bgarlinghouse) February 14, 2019
Further driving his point across, Garlinghouse directed his followers to an article he previously authored two years ago. Titled “The Case Against BankCoin,” the article argued how “bank tokens” are in no means any better than other digital assets, including XRP.
As Garlinghouse emphasized:
“We strongly believe banks need an independent digital asset to enable truly efficient settlement and we believe XRP is best positioned for that role. It goes back to the fundamentals of what makes digital assets unique and special – they’re universal currencies, meaning anyone can use them as units of value anywhere in the world. That universality gives digital assets global reach and the ability to settle much faster than traditional assets.”