Cryptocurrency News

Ripple CEO Brad Garlinghouse: JP Morgan’s New Coin “Misses the Point” of Crypto

February 15, 2019
Giancarlo Roma

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Ripple CEO Brad Garlinghouse: JP Morgan’s New Coin “Misses the Point” of Crypto

Ripple (XRP) CEO, Brad Garlinghouse, says JP Morgan’s new cryptocurrency “misses the point” of crypto in a tweet published to his account yesterday. The tweet included a link to a longer form piece Garlinghouse published on LinkedIn in August 2016.

Yesterday, JP Morgan announced it would release its own cryptocurrency, JPM Coin, that would be used to increase the speed and efficiency of settlements across three (initially) of its operations. Garlinghouse responded soon after the news broke; his full tweet reads:

“As predicted, banks are changing their tune on crypto. But this JPM project misses the point — introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer.






The article Garlinghouse linked to critiques the idea of big banks issuing their own proprietary coins, calling the practice “deeply misguided.” In his argument, he lays out two ways the continued issuance of these “bank coins,” as he calls them, could play out:

“Scenario one: all banks around the world put aside competitive and geopolitical differences, adopt the same digital asset, agree on its rules, and harmoniously govern its usage. Fat chance.

Scenario two (the more likely scenario): banks not in the issuing group issue their own digital assets with their own sets of rules and governance.”

As Garlinghouse explains, banks would effectively have to make markets between each of their bank coins, or trade between them and a fiat currency, potentially creating a very convoluted ecosystem of bank-issued cryptoassets. The fear, as he puts it succinctly, is “The result would be an even more fragmented currency landscape than what we have today.”

It should be noted, however, that JPM Coin is in many ways a competitor. Unlike Ripple, JPM is a stablecoin (pegged directly to the U.S. dollar) that for the time being is only used within the context of one bank. However, the two coins have the same ambition of replacing the antiquated Swift system, so it is possible Garlinghouse’s comments reflect not only his difference of opinion, but his his natural disdain for a competitor.