2 Comments

  1. Hi Paul, I attended the Ledgerfest’19 blockchain conference last week at Columbia University in NYC. They had a guy there from the JPM Coin project. He played it down, repeating that it is only a trial, and was very coy otherwise. Kept saying “I can’t comment on this, can’t comment on that”. I asked him why we needed a ‘stable coin’ linked to the USD, when the USD already is (to 99.9%) a digital currency. He explained that JPM settles $6-7 trillion per DAY (!) in payments, and that cross-border it is just not possible to do real-time with USD’s due to regulatory hurdles. So the JPM Coin idea is to enable instant cross-border settlement, say, within a company with accounts (liquidity and liabilities) around the world, so netting becomes much easier. JPM will hold 100% of the corresponding value in USD’s (digital form).
    My thoughts: So it’s another abstraction of money. This will increase the velocity of money. Also, once adopted by many clients, JPM could decide to not hold 100% of the value in USD’s, effectively opening the door to more fractional reserve banking (not sure that is the intention at this stage; I tend to believe motivation is really cross-border settlement).
    Dude claimed that JPM has so many counterparties around the world that they could offer to settle 80% of world-wide settlements with their coin.
    Will be interesting to see what central banks have to say about that since it effectively creates private money outside their control.

    • Hi Alex, interesting, thanks for sharing. I would be very interested to see what kind of capital relief this kind of netting could offer to a bank like JP Morgan.