JP Morgan announced yesterday they’re first every cryptocurrency coin, used to help settle payments between clients in its wholesale payments business. The JPM coin is the first digital currency to be backed by a major US bank.

Many in the community were quick to point out the irony, considering its CEO, Jamie Dimon, had been a very publically vocal critic of the technology, even threatening to fire any of his staff who owned tokens.

While the JPM coin is essentially the opposite of what a real blockchain should be, its characteristics make it very similar to an existing project which already has very similar ambitions to what the JPM coins want to achieve- Ripple.

Ripple already has an existing payment infrastructure in which the XRP token is to be used by banks to facilitate the cross-border transaction. It is this very architecture that a Bloomberg editor believes will be ‘a direct threat to Ripple.’

Currently, the third largest cryptocurrency project by market capitalization of approximately $12.6 billion, the Bloomberg editor Alistair Marsh has quoted Delphi Digital’s’ Tom Shaughnessy saying:

“This is a huge slap in the face for Ripple, Ripple’s target market is cross-border payments and remittances, and now JPMorgan’s effort is a direct threat.’’

One of the vital differences between the two coins is that the XRP token is always under threat in response to market volatility, whereas the JPM token’s value will be pegged to the US dollar, making it a much more stable medium of exchange.

“The JPM Coin is a stable coin whereas XRP is anything but stable,’’ said Shaughnessy. “That’s going to be a very contentious point for banks who don’t want the currency in which they make payments to be volatile.”

Joe Weisenthal, co-host of Bloomberg’s What’d You Miss? Also added:

“If it turns out that the Blockchain/Coin framework turns out to be a good one for banks transferring money around, then the JPM Coin should absolutely obliterate Ripple. Think about it, let’s say you were in the business of transferring money, why would you take on the exchange rate volatility risk associated with having Ripple as a bridge currency, when you could have a fiat-coin backed by JPMorgan. No brainer.”

However, Brad Garlinghouse, Ripple chief executive, initially played down JPM’s perceived threat, tweeting:

“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.”

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