JP Morgan announced their JPM Coin earlier this week and like any press release using the words “JP Morgan” and “Cryptocurrency”, it got a heck of a lot of play in the media. But what JP Morgan has created is not a cryptocurrency. They created a distributed ledger platform for intra-institutional settlement processes; They created an internal blockchain to track payments between their customers.
The company knows their JPM Coin is not a cryptocurrency; their FAQ’s layout many of the differences. It does not pass some simple tests for a cryptocurrency: it is not publicly available, it is not permissionless, there are no nodes outside JP Morgan’s control. A true cryptocurrency is open to all and is permissionless.
I have read a few well-written articles that are pointing out the problems this JPM Coin is potentially creating for the cryptocurrency community, and how this is just a press release capitalizing on some buzzwords to help JP Morgan’s public profile, I prefer to think of this as another step towards mass adoption of cryptocurrencies.
For those who do not follow the cryptocurrency industry, the fact that they see the words “JP Morgan” and “Cryptocurrency” together in a headline or on CNBC or in an article is removing another psychological barrier to accepting that cryptocurrencies are the future of financial services. However those of us involved in changing the way humans interact with “money” still need to be wary that the closed-environment, permissioned DLT solutions that many global financial institutions will implement in coming years do not absorb the term “cryptocurrencies” for themselves.