JPM Coin unlikely to create competition to XRP, Binance believes

Posted 04 March, 2019

One of the leading crypto trading platforms Binance has carried its own research regarding the potential of the recently released stablecoin by JPMorgan. 

The R&D division of Binance, Binance Research compared in the latest report JPM Coin and XRP, and whether these two coins could become direct rivals in the market. 

The Binance research team stated that JPM Coin that was rolled out in mid-February was designed mainly to deal with payments between financial organizations and based on the Quorum, which is a private Ethereum-based blockchain. One and the key aspect of the Quorum is proof of zero disclosure.

At the same time, XRP is said to be created for being a middleman between fiats and cryptos. Binance Research stated that XRP is more opened against the JPMorgan's initiative.

"It is very unlikely that JPM Coin will disrupt the existing stablecoin industry in the near term owing to its permission, private nature. Currently, stablecoins issued by banks are designated to serve a specific purpose and as a result, do not directly compete with the existing stablecoins," as the report reads.

Still, JPMorgan capital reaching $2.6 trillion worth assets enables the company to become one of the major stablecoin blockchain issuers in the market.

JPM Coin also reportedly shows the potential to boost the performance of traditional financial services via making them faster and cheaper. Nevertheless, the stablecoin market will feel a marginal impact from this coin in the near term.

"Large banks and financial institutions such as J.P. Morgan have a distinct set of advantages in issuing fiat-collateralized stablecoins, but these offerings will not displace liquid, publicly traded stablecoins in the near-term given their closed ecosystems built on private blockchains," according to the document.

The research team noted that JPM Coin can represent the third generation of stablecoins "that targets a particular market segment: financial institutions."

It should be mentioned that it was also stated in the report that other banks are unlikely to use JPM Coin in their operations given its centralized and proprietary nature, though this initiative can push other banking institutions for going into their own coins.

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