During the bearish trend of the crypto market, crypto personalities kept saying that the involvement of huge financial firm in the cryptos will improve the circumstances in the space. With the announcement of JPMCoin’s launch, the hope of recovery in the crypto market saw a surge. However, the vibe didn’t last long, as many analysts presume that this crypto coin by the massive financial institute JP Morgan is not going make any big results.
The CEO at JP Morgen, Jamie Dimon, has recently announced its own cryptocurrency named JPMCoin. Interestingly, the CEO at JPM has been strongly criticizing the cryptocurrencies but was optimistic about its underlying technology that is Blockchain. The newly announced crypto asset by JP Morgan differs from the current cryptocurrencies at some major points. The JPMCoin is largely centralized as the analysts observe, unlike Bitcoin. Notably, the JP Morgan crypto coin does not enable trading for the public. JPMCoin will be used to carry out a small fraction of JPM’s cross-border payments with clients.
Here, a JPM veteran and founder of blockchain firm Kadena, Will Martino stated regarding JPMCoin, “It is far from fulfilling the promise of creating an ecosystem whereby all participants can utilize a universally accepted and redeemable digital currency.” He added, “Instead, it is a mechanism where JPM will redeem a token that it issues on its platform only.”
He compared this to a scenario where one can buy, gamble, and encash gambling chips at only one specific casino. Also, the crypto community was quite unhappy looking at the centralized nature of the coin. As the JP Morgan crypto coin is not permissionless, some called it a fake cryptocurrency. Nouriel Roubini, an economist considered the coin as a joke. He Tweeted saying, “It is private not public, permissioned not permissionless, based on trusted authorities verifying transaction not trustless, centralized not decentralized.”
The centralized and controlled nature of JPMCoin makes it merely a digital currency, rather than a cryptocurrency. The basic characteristic of cryptocurrencies such as Bitcoin is its decentralized way of operating and the fact that it is censorship-resistant.