Binance Research: JPM Coin Won’t Be Direct …
Binance Research: JPM Coin Will Not Become Direct Competitor To XRP For The Foreseeable Future
The research division of the cryptocurrency exchange Binance has prepared a report on the recently announced stablecoin of the bank JPMorgan Chase, which, according to analysts, “will enter into direct competition in minimal volume” with the XRP cryptocurrency issued by Ripple.
As reported by Binance Research, the JPM Coin pilot project will initially focus on transactions between financial institutions and is based on the Quorum blockchain, which is a limited-access variation of Ethereum..
In the context of interbank settlements, the sphere of influence of JPM Coin will not overlap with XRP, since the latter serves as “an intermediate currency between fiat / cryptocurrencies and any fiduciary product”, while the former is used in strictly defined scenarios.
Binance Research claims that JPMorgan Chase, with $ 2.6 trillion in assets under management, “could become the largest stablecoin issuer on the blockchain in terms of volume of coins in circulation and total market capitalization.”.
JPM Coin is also well positioned to take on the role of a “third generation stablecoin prototype” focused on the world of traditional finance and meeting specific business needs through a restricted blockchain, adds Binance Research. According to analysts, Tether is a prominent representative of the first generation of stablecoins, which in 2018 began to compete with a whole series of regulated “second generation” coins..
Cryptocurrency JPMorgan, in turn, can have a significant impact on the cost and speed of settlement in traditional financial services, but in the short term it will not pose a threat to the public stablecoin market..
“Large banks and financial institutions have a certain set of advantages when issuing fiat-backed stablecoins. However, these offerings will not replace publicly traded liquid stablecoins in the near future as they are based on closed-circuit blockchains, ”adds Binance Research.
In addition, the centralized cryptocurrency developed by JPMorgan is unlikely to be picked up by other banking institutions of comparable size, which in the future may issue their own stablecoins, analysts conclude..
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