Why is JPM Coin not a threat to XRP ?

[JannaOneTrick 3,097]

English is not my first language, I am trying to understand why it is not a threat.

I know it is a coin used in a closed network, only from a portion of people owning an account at JPM.

But, what does a pegged to $ coin mean, and how does it make it less a of a threat to XRP ?

[Guest]

 

[Guest]

 

[automatic 3,898]

53 minutes ago, JannaOneTrick said:

English is not my first language, I am trying to understand why it is not a threat.

I know it is a coin used in a closed network, only from a portion of people owning an account at JPM.

But, what does a pegged to $ coin mean, and how does it make it less a of a threat to XRP ?

Sigh...  so much FUDness these days.  Here, let me see if I can clear it up once and for all.

There are currently three primary ways to send money internationally:

• By leveraging bank-sourced liquidity provided by the correspondent bank network and accessed via Swift (or xCurrent).
• By using proprietary pools of liquidity and access mechanisms provided by money transfer companies.  These only exist because such businesses spotted the opportunity created by the gaping hole in #1, and quickly moved to fill and monetize the gap.
• By using crowdfunded liquidity (xRapid exchanges) accessed via peer-to-peer network (xRapid).  In case you don't like the term "crowdfunding", then another way to look at it as "by using money transfer matchmaking service whereby requests to send money from one country are matched with requests to receive money in another country, and fulfillment accomplished via an intermediary money transfer instrument (xrp) bought and sold in individual countries' open markets (xRapid exchanges)"

Banks are for-profit businesses whose primary business model is to generate revenue by providing services centered on "money".  Any "money" that banks holds will be expected to generate revenue, and anything that bank touches will likewise do the same.  "Bank sourced liquidity (aka bank-supplied pool of money)" will thus come with inherent cost.  "Correspondent bank network" will also come with inherent cost, similar to how a supply and distribution chain of multiple middle-men comes with inherent cost.

xRapid cuts out both.  Rather than relying on a pool of money in source and target geographies to execute a transfer, it relies on xrp trade inflows and outflows in respective geographies in order to source volume necessary to execute a transfer.  Transfer liquidity is thus acquired dynamically, rather than pulled from a costly static (aka "backed with actual money") pool.  This - in conjunction with elimination of high touch/high cost traffic through the correspondent middle man network - is what drives the cost down.

Now, onto JPM Coin -

JPM coin is backed.  Backed means that for each token there is one dollar sitting somewhere representing that token.  If there is one dollar sitting somewhere, that means there is static bank sourced liquidity sitting somewhere.  If there is static bank sourced liquidity sitting somewhere, then nothing has really changed.

Does that clear it up?

Since I'm on a rant here, I might as well continue -

Looking at the model described above, it should be immediately apparent that the model effectiveness is directly proportional to xrp exchange liquidity.  Low liquidity equals lower cap on transfers that can be performed in this fashion.  Lower cap means that the network in its present state cannot be used by major players as the liquidity needed to handle their volume is not there.  HOWEVER - with each xRapid partner and client coming online, the pool of liquidity will become deeper.  As the pool becomes deeper, this will likewise make it possible for the solution to move up market.

The disruption in this case will not come from within the same level at which major banks operate today;  instead the disruption will come from BELOW.  It will come from smaller banks and smaller players taking the risk on xRapid as they are getting shafted by the current system and falling victim to the high base rates in their geographies or being too small to establish proper connections or negotiate discounts that would be necessary for them to not get shafted.  Euro Exim Bank.  Banks in SE Asia.  No-name players used as ridicule fodder by certain Forbes authors.  What all of these "experts" fail to realize in all of their glorious nearsightedness is that small players taking a risk on xRapid is a clear indication of a crack in the system - a crack caused by the inability of the current system to provide the level of service (and the cost) needed for the smaller players to remain competitive.  As these small players take the risk of finding the service they need at prices they desire, their doing so will increase the pool of exchange liquidity and allow others to do the same, and pretty soon what is now merely a crack will become a full blown avalanche that is going to bury all these experts and incumbents under so much crap that not even their avalanche beacon signal will be getting through. 

So let them laugh now from their posh ski lodge at the bottom of the hill.  If this plays out the way I think that it will, soon we will be skiing over 50ft base of the finest powder located where their ski lodge once used to be.

[Konan45 213]

It is a threat but unlikely you'll hear that around here. 

No one knows what the future is going to look like. Very possible JPM gets a consortium on board to use their coin which is stable and may come across as more trusted. 

Understand a lot of banks already go through JPM for their cross border transfers. 

But maybe it's as people say that there will be too many walled gardens and will need XRP to transfer between them. But then again maybe not and maybe XRP will fail. Never forget that is a very real and currently more likely possibility. 

But also XRP could adapt its use case which it always was going to do eventually IMO and still have a bright future. 

[xrphilosophy 2,081]

JPM and Citi although globally powerful do not exactly have a great relationship with the IMF (remember the financial crisis of 2008?)  The global cascade effect of their financial dealings and financial instruments came into broad scrutiny worldwide whether this is spoken about extensively in the financial rags or not.

Edited February 15, 2019 by xrphilosophy

[XRPJoe 133]

JPM created this coin for payments to large institutional bankers also it is going to be used for Federal Reserve payments and settlements for Federal Reserve Stock holders. Its also a test coin before the Federal Reserve coin which will be traded for JPM Coin then into cash. 

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Edited February 15, 2019 by Guest

[Julian_Williams 12,957]

Here you are, Eri lays it out for you; JPCoin is NOT a threat and anyone who tries to say so simply does not understand the difference between a Stable Coin and a Bridging Asset

 

Edited February 15, 2019 by Julian_Williams

[sharpn 118]

JPM coin is a represtantion of value your not moving true value as it can't be bought and sold on the open market which gives it true value.

This is nothing more than using blockchain technology. It's irrelevant to our market.