- A report of the World Economic Forum on “Central Bank Digital Currencies (CBDC)” describes that Ripple’s XRP token is perfectly suited for this purpose.
- According to Brad Garlinghouse, other prominent coins such as the JPM Coin do not solve the problem of cross-border transfers.
A study by the Bank for International Settlements (BIS) has shown that a central bank-supported digital currency (CBDC) is supported by governments, especially in emerging markets with poorly developed economies. In addition, more than 80% of the 66 central banks surveyed are already working on the development of a CBDC in some form. Furthermore, 40% of the banks surveyed have moved from a conceptual stage to an experimental stage in their projects. This figure represents a significant increase compared to 2018.
Ripple’s XRP is a potential candidate
In regions with a poorly developed infrastructure for banking services, fast and at the same time cheap remittances can ensure the survival of many people who often do not have sufficient access to a bank account. A new report by the World Economic Forum on “Central Bank Digital Currencies (CBDC)” describes that prominent digital currencies could be JPM Coin or Ripple’s XRP.
"Ripple's XRP is designed for inter‑ or intrabank payments and settlements"
— XRP_Cro (@stedas) February 14, 2020
The JPM Coin is a stable coin that is linked to the value of the USD and is therefore not subject to major fluctuations. In addition, the JPM Coin is issued on a private blockchain controlled by JPM Morgan Bank, which is operated under the Bank’s Internal blockchain Task Force Quorum, and can only be used by selected companies and banks.
The XRP token is subject to the price fluctuations of the digital asset and acts as a bridge currency to transport a digital value from one end of the world to the other, almost in real time and at low cost. Whether the base currency is the USD or the Mexican Peso, XRP transfers the value transparently and quickly.
Brad Garlinghouse, CEO of Ripple, recently stated in an interview that he has great doubts that the JPM Coin will prevail with other banks:
JPM coin will run on a blockchain network called Quorum, which requires permissions and users must be approved by JP Morgan. » all the other banks will use it for sure! They will certainly ask their clients to open an account @ JPM too. seriously?
He further describes that the JPM Coin can only be used for USD to USD transactions, saving transaction fees and transfer time, but offering no other advantages compared to a classic bank transfer:
If you’re just moving within the JPM ledger, and it has to be dollar-to-dollar, one-to-one backing, I don’t understand what problem that solves.
Marjan Delatinne, Head of Global Banking at Ripple, also describes that regional banks are “hungry” for a change that will benefit not only the large banking institutions, but also medium-sized banks. In an interview published at the end of last year, she says:
[…] but what is apparent with the regional banks and also the payment service providers is that they are hungry for change and for having a competitive edge. That’s really the driver: being able to source on-demand liquidity and providing a real-time experience in terms of cross-border payments.
Ripple’s payment solutions are aimed at precisely these market participants, so it is actually no surprise that the transaction volume via the payment solutions offered by Ripple is reaching a new all-time high on several payment corridors. On-Demand Liquidity (ODL), which relies on Ripple’s XRP token, also posted a volume increase of more than 390% in the fourth quarter of last year.
JPMorgan considers merger with Ethereum developer studio ConsenSys
As Crypto News Flash has already reported, there are negotiation talks between the Ethereum development studio ConsenSys and the banking giant JP Morgan. JPMorgan currently employs a development team of almost 25 people for the Blockchain project Quorum. Quorum forms the basis of JPMorgan’s Interbank Information Network (IIN), which has been expanded to a network of 320 banks that exchange global payment data via the blockchain.
The joint development of new block-chain-based products could therefore have far-reaching effects on the banking landscape in the United States. Through the cooperation with ConsenSys, which has not yet been finally confirmed, JP Morgan could bring further blockchain expertise on board.
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