Why Ripple (XRP) is not afraid of competition with JPM Coin
Date: 2023-07-03 Author: Karina Ziganova Categories: IN WORLD
Since the advent of Bitcoin, the cryptocurrency market has developed rapidly, giving rise to many unique digital assets, each of which claims to offer something special. Among them is the XRP digital asset, created by Ripple Labs to solve financial problems in the real world.
However, as the industry evolves, so does the competition. Financial heavyweight JPMorgan Chase has introduced a new player in this field - JPM Coin. The appearance of this coin has sparked a debate about the threat it poses to cryptocurrencies such as XRP.
Comparing JPM and XRP
XRP is positioned as a tool for fast and cheap transactions, primarily in the field of cross-border payments, especially in the banking sector.
Unlike Bitcoin, the Ripple blockchain does not depend on miners. It allows you to reach consensus on a transaction within four seconds, with its native token XRP acting as an intermediary in currency exchanges without the need for third parties.
This advantage allowed Ripple to enter into partnerships with more than 200 financial institutions and organizations and turned the project into one of the world's leading unicorns in the fintech segment.
When JPMorgan released its JPM Coin, the market started talking about whether it would affect the fate of XRP. JPM Coin is a stablecoin pegged to the U.S. dollar. It is designed to make instant payments using blockchain technology inside JPMorgan.
Although both XRP and JPM Coin are aimed at speeding up and simplifying financial transactions, their features and applications differ significantly.
XRP was conceived as an intermediary between various fiat and digital currencies. Meanwhile, JPM Coin is a closed network solution within the JPMorgan Chase ecosystem.
Ripple's regulatory problems play into JPMorgan's hands
Despite its potential, the Ripple ecosystem has faced significant challenges. In particular, we are talking about a lawsuit by the SEC (US Securities and Exchange Commission), which alleges that Ripple Labs illegally sold XRP as an unregistered security. XRP, unlike Bitcoin, is considered centralized, so it is more vulnerable to attacks from regulators.
Meanwhile, JPM Coin has a number of significant advantages that make this coin attractive. Backed by JPMorgan's extensive deposit base, it provides a less volatile and more secure payment method. At the same time, blockchain technology provides speed and flexibility of payments.
For JPM Coin, only JPMorgan acts as a lender, which significantly reduces the potential double-credit risks inherent in the XRP token.
At the same time, JPM Coin does not rotate in the cryptocurrency market, so it is unlikely to affect its dynamics. The coin is used only by corporate clients of the bank for wholesale payments, further narrowing its sphere of influence.
However, it has recently become known that JPMorgan is now expanding the range of services offered using JPM Coin for corporate clients. The bank has implemented blockchain payments in euros, although JPM Coin was originally launched to transfer dollars.
Although JPM Coin accounts for only a small fraction of JPMorgan's $10 trillion daily payments, the growth potential should not be overlooked. The ability to make payments faster than traditional transactions could be a game-changer in the industry.
Is JPM Coin a real threat to XRP?
The answer to this question is complicated. While JPM Coin certainly represents a challenge in the digital payments space, it is not a direct competitor to XRP because it operates in a different market.
However, its appearance suggests that traditional banking systems are gradually switching to blockchain solutions. This is a trend that Ripple and other cryptocurrencies should keep a close eye on as it could have significant implications for their future.
