Is JPMorgan cryptocurrency a direct threat to XRP?

On February 14, JPMorgan, the $340 billion banking giant, launched a stablecoin called JPM Coin. Industry experts foresee the stablecoin thrashing Ripple and its cryptocurrency XRP in the long run. Joe Weisenthal, co-host of Bloomberg’s What’d You Miss? said:

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.

Executives at major cryptocurrency investment firms such as Multicoin Capital raised a similar issue for XRP. The Ripple blockchain network is a payment infrastructure for cross-border transactions which banks and financial institutions can utilize to send and receive payments with low costs and faster clearing time.

RippleNet and XRP serve as the main tools on the Ripple blockchain network that enable financial institutions to clear transactions using the blockchain. The value of any settlement network comes from its liquidity and on a banking network, the liquidity comes from the number of banks that exist on the network. Ripple, the company, has been focused on establishing partnerships with both banks and fintech service providers throughout the past several years, primarily to improve the liquidity of the network.

The concerns of industry executives and experts on the long-term growth trend of XRP is that if JPMorgan uses JPM Coin to settle payments between its clients, as the bank said, it will put XRP in direct competition with JPM Coin. The problem is, that is exactly what Ripple was built for and the company has the same vision as JPM Coin: to overtake SWIFT and establish a global blockchain network for financial institutions. But, in comparison to other well-performing cryptocurrencies such as Binance Coin and Bitcoin, XRP has underperformed. It remains to be seen whether the increasing competition in the blockchain sector and cross-border transactions market will directly lead toward a decline in the price of XRP. The concerns in the long-term growth of XRP are in the challenging environment Ripple is in following the release of JPM Coin to secure banking partners.

Bloomberg Editor Says JPMorgan’s Cryptocurrency Will ‘Obliterate’ Ripple; is XRP in Trouble?, CCN, Feb 15