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Happy Valentine's Day from JP Morgan


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27 minutes ago, jheff said:

JPM coin is the bridge currency. Here is a scenario: JPM Corporate client needs to pay for industrial machinery in yen. They escrow cash, JPM issues them JPMC and sends JPMC to a) the wallet of the seller of the machinery or b) a wallet of the client and converts at the JPMC/Yen spot rate to pay for the machinery. JPMC/Yen spot rate will be at the USD/Yen spot rate because the USD is escrowed before coins are created so 1 JPMC = 1 USD. The flow of funds would be USD -> JPMC -> Yen. If this scenario was to be mirrored with XRP this would be the flow of funds: USD -> XRP -> Yen.

No exchange rate risk of JPMC since it is pegged to USD. If clients are banking with JPM why would they switch over to Ripple and XRP if JPM has their own coin. People don't consider the value clients place on past relationships and trust. I'd bet money on CEOs and CFOs sticking with the status quo and the conservative approach to just stick with JPM. Why go from Bank Coin 1 to XRP to Bank Coin 2 when Bank Coin 1 and 2 are backed by fiat? Just create a Bank Coin 1/Bank Coin 2 trading pair.

All of this just shows banks would rather develop their own coin in-house than work with Ripple. Centralization and the selling points of XRP don't matter to them. The banking system is already centralized.

 

Who's buying the Jpm coin for yen? And this only works for USD related transactions ? 

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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

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.

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

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2 minutes ago, kiwixrp said:

Who's buying the Jpm coin for yen? And this only works for USD related transactions ?

Forex dealers in that country, most likely JPM themselves. They buy back the coins and take the USD out of escrow. 

Someone posted earlier about JPMC covering only internal transfers so maybe I'm jumping the gun. I'm guessing JPM would try and make their currency the universal acceptable asset over XRP which would really be tokenized USD as the universal asset.

Maybe I'm wrong, it just doesn't look good when JPM could partner with Ripple, use XRP, but instead decide to develop JPMC.

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5 minutes ago, jheff said:

Maybe I'm wrong, it just doesn't look good when JPM could partner with Ripple, use XRP, but instead decide to develop JPMC.

You mean like:

“”it looks bad when HTC could partner with Samsung and resell Samsung phones,   but instead they develop their own phone”?      

How on earth do you manage to conclude that it ‘looks bad’ that a company does its own thing rather than partner and use another?

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@jheff Part of the argument for XRP against JPM coin is that JPM coin is in fact a stablecoin - XRP isn't. This debate really comes down to whether a stablecoin is better suited for both cross-border and IOV or whether XRP is best suited. The reality is XRP is a bridge asset, it's not a bridge currency. Yes XRP can act as a bridge currency if it wants to in cross border but by being a bridge asset it has more use cases, is not inflationary, and doesn't carry the liability tag. It is an asset. JPM coin is therefore limited in scope.

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1 hour ago, jheff said:

JPM coin is the bridge currency. Here is a scenario: JPM Corporate client needs to pay for industrial machinery in yen. They escrow cash, JPM issues them JPMC and sends JPMC to a) the wallet of the seller of the machinery or b) a wallet of the client and converts at the JPMC/Yen spot rate to pay for the machinery. JPMC/Yen spot rate will be at the USD/Yen spot rate because the USD is escrowed before coins are created so 1 JPMC = 1 USD. The flow of funds would be USD -> JPMC -> Yen. If this scenario was to be mirrored with XRP this would be the flow of funds: USD -> XRP -> Yen.

No exchange rate risk of JPMC since it is pegged to USD. If clients are banking with JPM why would they switch over to Ripple and XRP if JPM has their own coin. People don't consider the value clients place on past relationships and trust. I'd bet money on CEOs and CFOs sticking with the status quo and the conservative approach to just stick with JPM. Why go from Bank Coin 1 to XRP to Bank Coin 2 when Bank Coin 1 and 2 are backed by fiat? Just create a Bank Coin 1/Bank Coin 2 trading pair.

All of this just shows banks would rather develop their own coin in-house than work with Ripple. Centralization and the selling points of XRP don't matter to them. The banking system is already centralized.

 

Your scenario is still settling internally unless jpmc/yen pairing  you're referring to is settled through a third party. The only way this scenario works is JPMC is recognized as a settlement asset outside JPM. 

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1 hour ago, Flintstone said:

Which makes it a liability. XRP would be universal.

Yeah, and if you can prove escrowed dollars or repo securities back the liability, it's not a liability. 

If banks have liabilities that are outstanding in the form of loans or bonds, they are allowed to match the value of the liabilities in cash or money market instruments and remove the liability from the balance sheet. Same situation here. The fact that JPMC is a liability isn't a problem. 

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1 hour ago, Tinyaccount said:

You mean like:

“”it looks bad when HTC could partner with Samsung and resell Samsung phones,   but instead they develop their own phone”?      

How on earth do you manage to conclude that it ‘looks bad’ that a company does its own thing rather than partner and use another?

Because they clearly think the large investment is worth the business they'd generate as a result of competing in the digital asset remittance space. Same thought process any business makes when deciding to finance expansions. 

Instead of partnering they see an opportunity to compete and leverage the expertise and relationships they have vs. partner and let Ripple earn the revenue. 

You're also talking about HTC, who made the first Android smartphone. They didn't just enter the smartphone market to try and mimic Samsung. JPM is going into the digital asset space because they see an opportunity to put something better out there, kind of like how Samsung came into the Android space after HTC...

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1 hour ago, 7Bs said:

@jheff Part of the argument for XRP against JPM coin is that JPM coin is in fact a stablecoin - XRP isn't. This debate really comes down to whether a stablecoin is better suited for both cross-border and IOV or whether XRP is best suited. The reality is XRP is a bridge asset, it's not a bridge currency. Yes XRP can act as a bridge currency if it wants too in cross border but by being a bridge asset it has more use cases, is not inflationary, and doesn't carry the liability tag. It is an asset. JPM coin is therefore limited in scope.

Fair points. But let's see Jamie Dimon, $2.6 trillion, and 100+ years of client relationships and banking industry knowledge go up against Ripple and XRP.

Inflationary and liability points are weak in my opinion, especially the liability one for reasons I discussed. XRP does have the edge in being deflationary though. Inflation is just something the world economy has fixes for. When inflation comes back into the picture interest rates go higher and the inflation problem is fixed once the economy cools off. 

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7 minutes ago, 7Bs said:

I'd rather have XRP derivatives than JPM coin derivatives.

As would I. But in the article, Application 2 talks about securities issuances. JPM already has huge capital markets, investment banking coverage, and sales and trading businesses. So they have the upper hand in actually facilitating and trading the issuance of options, futures, swaps, and exotic derivatives. Not to mention they'd be underwriting the equity and bond issuances as well. 

This was the #1 use case of Codius IMO.

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25 minutes ago, jheff said:

Because they clearly think the large investment is worth the business they'd generate as a result of competing in the digital asset remittance space. Same thought process any business makes when deciding to finance expansions. 

So were you previously thinking that every company would just roll over and let Ripple have it all?  And now you see that isn’t true you think it’s bad?

Nothing new or changed here at all.  This has been known, and even done before, and was fully expected.  If it shocks or alarms you then you either haven’t researched this enough,  or there is some other agenda going on.

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9 minutes ago, Tinyaccount said:

So were you previously thinking that every company would just roll over and let Ripple have it all?  And now you see that isn’t true you think it’s bad?

Nothing new or changed here at all.  This has been known, and even done before, and was fully expected.  If it shocks or alarms you then you either haven’t researched this enough,  or there is some other agenda going on.

These big players and consortiums like SWIFT and Co are a big boys club that have been around for ever.

The power they yield is immense, if they want Ripple to fail, they have the ability to make it happen.

A small software company is no match for them.

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