The recently announced JPM Coin has inspired quite a debate within the world of cryptocurrencies—some believe J.P.Morgan could pose a major threat to Ripple, whereas others are more sceptical. According to Forbes, the fate of the coin largely depends on the way it is used. While both XRP and JPM Coin are meant to function in similar ways, the latter will be U.S dollar-backed, which ensures rate stability.
However, this incentive alone does not signify that the coin will be used to threaten xRapid, which supports a variety of currencies. Forbes notes that J.P.Morgan’s coin will initially only be available to the bank’s clients, which lowers its potential impact. Moreover, the move suggests the product could be “merely marketing hype” meant to draw potential investors in, as well as an improvement to the bank’s internal structure. Previously, J.P. Morgan’s institutional clients were forced to use SWIFT and Fedwire for internal transfers.
Still, Forbes argues that the strategy could complicate Ripple’s plans for going after major banks. Even before its eventual extension to other currencies, JPM Coin could potentially take over USD-backed transactions between large corporations and banks. And with one of them moving to create their own payment solution instead of collaborating with a third party, the idea could potentially inspire other major banks to follow suit.