JP Morgan launched their cryptocurrency called JPM coin, and from what I’ve read it’s a very dangerous development which will allow them, and other banks who follow in their footsteps, to create an even bigger banking scam. Here’s from the BBC:
US investment bank JP Morgan has created a crypto-currency to help settle payments between clients in its wholesale payments business. JPM Coin is the first digital currency to be backed by a major US bank.
Can anyone use JPM Coin?
No. JPM Coin is not for retail customers – it will be used internally by JP Morgan to enable the instantaneous transfer of payments between institutional accounts.
When a JP Morgan client deposits money into an account, the money is converted into an equivalent number of JPM Coins, so $1m equals one million JPM coins.
The client can then use the coins to perform transactions over the bank’s blockchain network Quorum with other clients, for example money movement or payments in securities transactions.
Once the transactions have been performed, holders of JPM Coins can redeem them for US dollars from the bank.
So the JPM Coin is backed by the US dollar where one JPM Coin equals one US dollar as noted above. But here’s the problem: who guarantees this? Who says JP Morgan won’t allow creation of more JPM Coins than they actually have US dollars in their vaults? Banks have already been scamming everyone with fractional reserve banking where they create money out of thin air by loaning out more money than people actually deposit. Something like the JPM Coin will make that so much easier for them; they’ll be able to create as much JPM Coin as they want to, and people will only realize there’s a problem when most of them try to convert their JPM Coins into US dollars, finding out that the bank doesn’t actually have as much US dollars to pay them.
Remember that years ago the US dollar used to be backed by gold. It got decoupled allowing the Federal Reserve in the USA to keep printing US dollars which today are backed by air. The only thing preventing the US dollar from total collapse right now is the military power of the USA and the fact that they still force the US dollar to be used to buy oil.
So if the US dollar is backed by nothing, and the JPM Coin is backed by the US dollar, then you do the math. The Federal Reserve can print as much US dollars as they like, and JP Morgan can create as much JPM Coins as they like. If you fall for this scam after reading this, you’ll only have yourself to blame. JP Morgan CEO Jamie Dimon called Bitcoin a “fraud” in the past and now he appears to love cryptocurrencies. I’m not surprised; like I warned in the past, the banks will try to find ways to co-opt cryptocurrencies into their scams.
If you want to know how a reliable cryptocurrency should work, then I recommend reading my post “On money, Bitcoin and cryptocurrencies in general”.