J P Morgan’s crypto-currency a game changer

Three years ago, Jamie Dimon, chief of J P Morgan one of the world’s largest financial institution, attacked Bitcoin and crypto-currencies declaring they will never replace fiat currency.

Dimon took the initiative after Bitcoin’s price ballooned as punters lined up to acquire this new form investment. Taking a cue from central banks, Dimon applauded the Blockchain technology, an essential part of the crypto-currency but demonized the cryptos.

It is still bewildering that opponents still want to play that card despite the fact that Bitcoin cannot be separated from the Blockchain. The creators of the crypto came up with a total package that addressed all possible challenges/problems likely to be encountered when using it and Blockchain is an indispensable part of that.

Nevertheless, Mr Dimon has tried to walk back his earlier comments leaving some to wonder what could have prompted this, although it is likely he was simply trying to buy time.

Fast forward to 2019, J P Morgan announces it is finally joining the currency issuing club. It does not matter how the institution tries to spin this, what is very apparent now is the fact even conventional financial players are keen to break the central bank currency issuing monopoly.

Bitcoin started this movement which continues to grow and now, one time opponent has finally summed up the courage by putting on trial a token, which it hopes will address some of the inefficiencies seen in the fiat alternative.

According a report by CNBC, trials are set to start in a few months and a tiny fraction of that will happen over a digital token called the JPM Coin. This institution moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business.

Obviously, the JPM coin has features akin to a stablecoin, which many believe to be less volatile than original crypto-currencies, hence they have a better chance of acting as both medium of exchange and unit of account.

The J P Morgan revelation is a colossal coup for the crypto-currency movement because the giant institution’s move chips away at many a regulators’ assertion that cryptos are not currency. At the very least, the JPM Coin is an endorsement of the decentralization ideals that are espoused by Bitcoin creators.

In the near future, more conventional institutions will follow suit and launch their own coins, and at that point it will be difficult for regulators to carry on the same way without inviting a backlash. 

J P Morgan’s move presents central banks with a particular dilemma.

 The crypto market threshold that would get many regulators worried will easily be surpassed once major banks join this market. To illustrate, some regulatory bodies believe that when market capitalization of cryptos reaches $2 trillion, then more stringent regulations must apply.

There is no doubt that J P Morgan will fight such regulations if this coin proves to be useful. Cryptos look destined to become mainstream despite problems hindering mass adoption.