In a Brad Garlinghouse vs. Jamie Dimon crypto showdown, the Ripple chief is not the least bit intimidated by his Wall Street rival.
Ripple CEO Unloads on JPMorgan Cryptocurrency at DC Blockchain Summit
Garlinghouse was featured as the keynote speaker at DC Blockchain Summit 2019, where he gave a fireside chat with Nasdaq’s Jill Malandrino.
The elephant in the room, metaphorically speaking, was the recent news of Wall Street bank JPMorgan issuing the so-called “cryptocurrency JPM Coin for its institutional clients.
Garlinghouse, who has been known to sport red socks with his suit, didn’t back down from the line of questioning, even sounding like a team player at times for the industry:
“I think it’s great for the blockchain and crypto industry to have players like JPM leaning in. Thumbs up. That’s great. That’s the only nice thing I’m going to say about this.”
Garlinghouse: JPM Coin Doesn’t Solve any Problem
According to Garlinghouse, it was only a matter of time for banks to enter the crypto fray. Nonetheless, for cryptocurrency and the blockchain industry to achieve mainstream adoption, products such as decentralized apps and coins must solve some type of problem for users. Garlinghouse went down that trail, exploring the limited use cases of JPM Coin.
For instance, JPM Coin resembles a stablecoin, given its 1:1 backing by the U.S. dollar. Institutional customers, however, must give the bank a dollar for every JPM Coin they transact in, after which time the cryptocurrency can only be moved within the confines of the centralized JPMorgan ledger.
“Wait a minute, just use the dollar”, Garlinghouse quipped, adding: “I don’t understand what problem that solves.”
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 https://t.co/39EAiSJwAz https://t.co/e7t7iz7h21
— Brad Garlinghouse (@bgarlinghouse) February 14, 2019
Ripple CEO: ‘I Don’t Get It!’
As a blockchain-powered cross-border payments startup, Ripple uses XRP in its flagship products for banks to settle payments with one another in a faster, cheaper way.
For instance, problems with the SWIFT network reportedly attracted one of Ripple’s most recent customers, Euro Exim Bank, to use XRP via xRapid for payments. Additionally, Brazil-based payments startup BeeTech Global is helping business owners in the Latin American region to achieve significant cost savings. BeeTech has traded in its SWIFT network fees for remittances for Ripple’s blockchain technology, with fees falling from “$20 to $2 per transaction in the process.”
JPM Coin is on the fringes of what Ripple does but stops short of displaying even a hint of decentralization, Ripple’s own argument surrounding decentralization notwithstanding.
Garlinghouse explained how he previously questioned a Morgan Stanley representative about whether that firm would be using JPMorgan’s crypto token, to which the response was “probably not.” He then went on to question whether Citi, Bank of America, or PNC would have any interest in JPM Coin, concluding: “The answer’s no.”
He lamented that if this means that “we’re all going to have these different coins,” the industry is back to square one with a lack of interoperability.
“I don’t get it,” he complained.
Here’s where he is willing to take one for the team, saying that even if the only problem that JPM Coin solves is “JPM being associated as they’re leaning into crypto, yay.”