Jump to content

Happy Valentine's Day from JP Morgan


Guest
 Share

Recommended Posts

I think one of the most important aspects about today is really how we define walled gardens, a bridge asset, the word internal, and stablecoin moving forward. It seems as though JP flipped all this today, whether successful or not remains to be seen, by potentially pointing out that their internal stablecoin can be a global bridge asset because there are walled gardens within walled gardens and their Camelot coin is publically internal? Does decentralized now mean publically internal and does this new frame of mind spread, benefitting JPM coin? Did counter party risk become obsolete even though it's still a liability on the issuer's balance sheet?

My other question is, if they are pushing JPM coin for real-time settlement pegged 1-1 with USD, are they trying to be a first mover basis custody solutions - basis current USD holders simply swapping the balance sheet of nostro / vostro account with the new coin?

Edited by Guest
Link to comment
Share on other sites

3 hours ago, 7Bs said:

My other question is, if they are pushing JPM coin for real-time settlement pegged 1-1 with USD, are they trying to be a first mover basis custody solutions

No Commercial bank or Stablecoin will ever be able to maintain a "first mover advantage" over Central Bank issued CBDC.

There is a difference between... "money in the bank", aka bank liabilities... and "cash in hand", aka Central Bank liabilities.

Going digital or crypto or blockchain, will not change the underlying facts about which balance sheet / ledger that things are accounted for on.

Unless I'm on JPM's investment committee, I see nothing to worry about here.

They may simply burn up some capital to learn something, so others wont have to pay to learn that lesson.

Link to comment
Share on other sites

28 minutes ago, ScroogeMcDuck said:

But is it a security?

No. It's pegged to the dollar.  No expectation of profit.

In fact, holding this coin guarantees you will lose money.  Everytime the US Govt prints money, it's value will decline.  Probably cost you about 2% per year loss to hang on to these.  The US dollar is inflationary. 

 

 

Edited by spiras
Link to comment
Share on other sites

Let's look at this objectively rather than in an ignorant light.

After reading this article you can't honestly say that this doesn't compete with what Ripple is trying to do with XRP. While I love Ripple and XRP it is important to recognize your own bias as an investor rather than conform to your bias. This materially changes things for an investment in XRP.

In bold is a section of the CNBC article posted today about the applications of JPMC.

Real-time settlement

There are three early applications for the JPM Coin, according to Farooq.

The first is for international payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift. Instead of sometimes taking more than a day to settle because institutions have cut-off times for transactions and countries operate on different systems, the payments will settle in real time, and at any time of day, he said.

The second is for securities transactions. In April, J.P. Morgan tested a debt issuance on the blockchain, creating a virtual simulation of a $150 million certificate of deposit for a Canadian bank. Rather than relying on wires to buy the issuance — resulting in a time gap between settling the transaction and being paid for it — institutional investors can use the J.P. Morgan token, resulting in instant settlements.

The final use would be for huge corporations that use J.P Morgan's treasury services business to replace the dollars they hold in subsidiaries across the world. Unseen by retail customers, the business handles a significant chunk of the world's regulated money flows for companies from Honeywell International to Facebook, moving dollars for activities like employee and supplier payments. It generated $9 billion in revenue last year for the bank.

Ok - so they issue JPM coin backed by USD. I will go through the three applications in the article.

First application: they transfer money to Country X from the US using JPM coin and buy the foreign currency in the spot market. If 1 JPMC = 1 USD and if 1 USD = .89 EUR then 1 JPM = .89 EUR. They sell the JMPC to a currency dealer and then redeem the JPMC for dollars and destroy the JPMC. This competes with Ripple.

Second application: This was exactly what got me excited about XRP's use case. No one realized the true potential of XRP since the derivatives and securities markets make up the vast majority of traded assets in the world. Again, JPM has first mover advantage in sales, trading, and already has a huge client base and relationships with institutional and corporate clients. BNP Paribas tested this exact securities issuance process with Ethereum last year. Why would a big bank use Ripple's services and XRP if they can either a) develop their own or b) use JPMC.

Third Application: This is what XRP was supposed to become after capturing the international remittance market. All these longshot rumors surrounding Amazon and Uber using XRP for intercompany payments just became that much less unlikely. It was a good application and idea from whoever started it and I agreed that treasury was a perfect application of XRP, but why would a company partner with Ripple if they already have a relationship with JPM. 

This isn't FUD, this is my opinion. I own a lot of XRP and reading this article today from CNBC was a pretty big blow. There's no way to spin this and say this doesn't directly compete and threaten what Ripple is trying to do with XRP. Before anyone says JPMC is centralized if you're a client of theirs, why would you care? If you already have corporate accounts and a long-standing relationship with the bank everything is already centralized. It just speeds up admin and back-office operations and makes JPM offer lower cost services and offer a competitive advantage. Why would any company sign on to Ripple now that the leading (or second leading to GS) financial institution in the world has its own in house crypto that has the same selling points?

Obviously, I'd like to be corrected but this is just my take on it. I would love to hear from others about why this isn't as much of a threat as I think it is.

Link to comment
Share on other sites

17 minutes ago, jheff said:

Let's look at this objectively rather than in an ignorant light.

After reading this article you can't honestly say that this doesn't compete with what Ripple is trying to do with XRP. While I love Ripple and XRP it is important to recognize your own bias as an investor rather than conform to your bias.

1)  Anytime some newbie says "let's examine our collective biases" (apropos of me not asking), that's flag #1.

2)  Anytime some newbie says, implicitly, in their opening statement, "if you don't agree you have them, whatever they may be, you must be ignorant", that's flag #2.

3)  Anytime some newbie says that and then adds "if you don't agree with what I'm, you know, 'as a fellow investor', about to posit, then that's confirmation bias", that's #3.

So, that's some flags on your play.  Run along - and have a nice day.

ETA:

Now, on the off chance that you're, you know, sincere - or have just graduated from (what passes for) college (these days) - here's a forum thread - from way before JPM announced they'd birthed their own piece of doodoo - where everyone here has already weighed in and analyzed "bank" /"stable" coins:

 

Edited by NightJanitor
Added link. Maybe he's just an idiot, not malicious. Who knows?
Link to comment
Share on other sites

3 minutes ago, NightJanitor said:

1)  Anytime some newbie says "let's examine our collective biases" (apropos of me not asking), that's flag #1.

2)  Anytime some newbie says, implicitly, in their opening statement, "if you don't agree you have them, whatever they may be, you must be ignorant", that's flag #2.

3)  Anytime some newbie says that and then adds "if you don't agree with what I'm, you know, 'as a fellow investor', about to posit, then that's confirmation bias", that's #3.

So, that's some flags on your play.  Now, run along - and have a nice day.

Well just because I'm a newbie on the site doesn't mean I don't bring up any valid points. You didn't even address the stance I took. As investors, we need to bring up any bias when discussing news that materially affects the future value of an asset... I thought that clarifying I am long XRP would prevent someone from just claiming that my take is FUD.

You don't have to agree but instead of just bashing, why don't you pick apart my response and prove me wrong?

Link to comment
Share on other sites

2 hours ago, jheff said:

I thought that clarifying I am long XRP would prevent someone from just claiming that my take is FUD.

I'm a simpleton... very difficult for me to grasp the technical aspects of the questions at hand (your reservations seem sincere and well thought out)... one thing I can tell you is if somebody is suspicious of another spreading fud,  the above statement will not result in a situation where one will be won over.... to me, that's obvious.... don't you think?

Edited by EcneitapLatnem
seriously though.... so smart... put that much thought into it.... and that is a sure all/end all?
Link to comment
Share on other sites

2 minutes ago, NightJanitor said:

Did you read that 100+ post thread in the 2 minutes since I pointed you to it?  That's my "newbie" objection. We've done this.  I showed you where.  You don't want to read it, you want to teach us all about it.  I'm tired of that ****.  Don't be offended I said you're a "newbie" because you don't want to do the work; just do the work.  We're already way ahead - but you insist on dragging us back, with this tired "let's have a discussion about this;  I really care!" bit...  Well, you know, kid, if you really cared so much, you'd go do the reading.

good point!

Link to comment
Share on other sites

1 hour ago, jheff said:

Let's look at this objectively rather than in an ignorant light.

After reading this article you can't honestly say that this doesn't compete with what Ripple is trying to do with XRP. While I love Ripple and XRP it is important to recognize your own bias as an investor rather than conform to your bias. This materially changes things for an investment in XRP.

In bold is a section of the CNBC article posted today about the applications of JPMC.

Real-time settlement

There are three early applications for the JPM Coin, according to Farooq.

The first is for international payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift. Instead of sometimes taking more than a day to settle because institutions have cut-off times for transactions and countries operate on different systems, the payments will settle in real time, and at any time of day, he said.

The second is for securities transactions. In April, J.P. Morgan tested a debt issuance on the blockchain, creating a virtual simulation of a $150 million certificate of deposit for a Canadian bank. Rather than relying on wires to buy the issuance — resulting in a time gap between settling the transaction and being paid for it — institutional investors can use the J.P. Morgan token, resulting in instant settlements.

The final use would be for huge corporations that use J.P Morgan's treasury services business to replace the dollars they hold in subsidiaries across the world. Unseen by retail customers, the business handles a significant chunk of the world's regulated money flows for companies from Honeywell International to Facebook, moving dollars for activities like employee and supplier payments. It generated $9 billion in revenue last year for the bank.

Ok - so they issue JPM coin backed by USD. I will go through the three applications in the article.

First application: they transfer money to Country X from the US using JPM coin and buy the foreign currency in the spot market. If 1 JPMC = 1 USD and if 1 USD = .89 EUR then 1 JPM = .89 EUR. They sell the JMPC to a currency dealer and then redeem the JPMC for dollars and destroy the JPMC. This competes with Ripple.

Second application: This was exactly what got me excited about XRP's use case. No one realized the true potential of XRP since the derivatives and securities markets make up the vast majority of traded assets in the world. Again, JPM has first mover advantage in sales, trading, and already has a huge client base and relationships with institutional and corporate clients. BNP Paribas tested this exact securities issuance process with Ethereum last year. Why would a big bank use Ripple's services and XRP if they can either a) develop their own or b) use JPMC.

Third Application: This is what XRP was supposed to become after capturing the international remittance market. All these longshot rumors surrounding Amazon and Uber using XRP for intercompany payments just became that much less unlikely. It was a good application and idea from whoever started it and I agreed that treasury was a perfect application of XRP, but why would a company partner with Ripple if they already have a relationship with JPM. 

This isn't FUD, this is my opinion. I own a lot of XRP and reading this article today from CNBC was a pretty big blow. There's no way to spin this and say this doesn't directly compete and threaten what Ripple is trying to do with XRP. Before anyone says JPMC is centralized if you're a client of theirs, why would you care? If you already have corporate accounts and a long-standing relationship with the bank everything is already centralized. It just speeds up admin and back-office operations and makes JPM offer lower cost services and offer a competitive advantage. Why would any company sign on to Ripple now that the leading (or second leading to GS) financial institution in the world has its own in house crypto that has the same selling points?

Obviously, I'd like to be corrected but this is just my take on it. I would love to hear from others about why this isn't as much of a threat as I think it is.

I personally don't see how JPM Coin can be useful aside from internal settlements. Why would 10,000 plus other banks want to hold a quasi currency that is issued by one individual bank unless there is a mass consensus by a consortium of banks on the safety and the stability of the JPM coin. While still directly competing with JP Morgan in the same industry. 

If your argument is that it can be a bridge currency similar to XRP, who will be the intermediary party that holds this one specific bank coin for on/off ramp with whatever fiat JPM coin is bridging. 

Link to comment
Share on other sites

1 hour ago, jheff said:

There's no way to spin this and say this doesn't directly compete and threaten what Ripple is trying to do with XRP.

The day that everything "Runs on Ripple" is just not going to happen. The day that everything uses Quorum is also not going to happen. 

Have you taken into consideration that Ripple does not require market domination for XRP to be a very valuable and utilized asset?

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.