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Ripple CEO: I Don’t Understand What Problem JPM Coin Solves

Linas Kmieliauskas
Last updated: | 2 min read

Brad Garlinghouse, CEO of Ripple, a California-based crypto start-up focusing on the banking sector, once again used an opportunity to bash a new digital token, issued by the investment banking giant JPMorgan.

Brad Garlinghouse. Source: a video screenshot

“If you give [JPMorgan] 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! I really 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 honestly don’t understand what problem that solves,” he said during the Chamber of Digital Commerce’s D.C. Blockchain Summit in Washington on Wednesday.

Previously, Garlinghouse claimed that the JPMorgan’s 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.”

Meanwhile, in an article titled “The Case Against BankCoin” that he wrote in August 2016, he said that banks really have two options: either set aside all their differences and agree to use the same digital asset (which is not very likely to happen), or “banks not in the issuing group issue their own digital assets with their own sets of rules and governance.”

In either case, some experts still claim that JPM Coin is “a huge slap in the face for Ripple”.

“Ripple’s target market is cross-border payments and remittances and now JPMorgan’s effort is a direct threat,” Tom Shaughnessy, principal at Delphi Digital, a crypto research boutique in New York, previously told Bloomberg.

Moreover, as reported, JPMorgan is betting that its first-mover status and large market share in corporate payments, as it banks a large number of companies, will give its technology a good chance of getting adopted, even if other banks create their own coins. “Pretty much every big corporation is our client, and most of the major banks in the world are, too,” Umar Farooq, head of Digital Treasury Services and Blockchain at the bank, told CNBC in February. “Even if this was limited to JPM clients at the institutional level, it shouldn’t hold us back.”

Also, Jamie Dimon, CEO of JPMorgan, said recently that JPM Coin “could be internal, could be commercial, it could one day be consumer.”

As reported, there are three early applications for the JPM Coin:

  • International payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift.
  • Securities transactions.
  • The final use for JPM Coin would be for huge corporations who use JPMorgan’s treasury services business to replace the dollars they hold in subsidiaries across the world.


XRP price chart:
(JPM Coin was announced on February 14)