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JP Morgan Chase Logo On Building

Binance Research: JP Morgan Coin To Ignite Solid Cryptocurrency Adoption

· 05 Mar 2019 in Analysis
Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology. https://twitter.com/basil_kimathi

Binance Research, the research department of the Binance crypto exchange, has released a report indicating that despite the controversy surrounding JP Morgan’s crypto, the coin is capable of igniting solid cryptocurrency adoption.

As per the report, this would be driven by institutional investors whom JP Morgan will introduce to blockchain technology thereby driving interest in cryptocurrencies.

JP Morgan Coin Will Be An ‘Intermediate Stepping Stone’

With JP Morgan indicating that the JP Morgan Coin will be a stablecoin, Binance Research notes that:

“The rise of this third generation of stablecoins may only be an intermediate stepping stone for cryptocurrency mass adoption. Stablecoins running on private blockchains will contribute to increasing awareness of the rest of the blockchain and cryptoasset industry in the long run.”

The research also noted that since JPM Coin is being run on a private network and with a specific task, it does not pose as a direct competitor in the stablecoin market.

Previously, the bank’s CEO, Jamie Dimon, said that JPM Coin may be released for use by individuals to pay for goods and services at retail stores. However, the coin’s website does not give a glimpse on whether the coin will ever find its way to the retail sector.

With Ripple offering solutions for interbank transfers, the report by Binance Research indicates:

“The two projects [Ripple and JPM Coin] appear to have different focuses and potential applications in the short term. While there is currently no direct overlap on the functionality of the two initiatives, future developments on the reach of JPM Coin outside of its existing closed network will determine to what degree Ripple and JPM Coin will compete.”

But Brad Garlinghouse, Ripple’s CEO, has in the past been quoted saying that although the development of JPM Coin indicates the bank’s change of heart regarding cryptocurrencies, the coin “misses the point.”

According to the research by Binance, if JPM Coin would be pitted against other stablecoins already in the market, it would likely take a leading position.

The reason being that the combined market cap of all stablecoins does not reach 3 billion U.S dollars. On the other hand, JP Morgan handles 6 trillion U.S dollars in assets on a daily basis. What if JPM Coin is used to facilitate one percent of the assets on a daily basis? It would definitely overtake all stablecoins.

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