I'm confused what this offers over USDC. Banks can already issue USD backed tokens with this model. USDC is already being traded on several exchanges. I'm sure I'm missing something obvious.
It comes down to who is doing the coin creation and redemption. In the case of USDC, Coinbase is handling it. In the case of JPMC, JPMorgan would handle it.
The general public's trust in JPMorgan is probably higher than their trust in any crypto company that has yet to exist for an entire decade.
JPMorgan - and other banks - have a huge incentive to run their own "stablecoin" creation/redemption business, because it can in some ways allow them to skirt their reserve requirements, while also possibly netting them a tiny operating profit if they sell newly-minted JPMC above the price they redeem them for (leading to profit on the spread).
It's handled by CENTRE who's founding members are Circle and Coinbase.. but the network will grow to include any compliant banking institution.
> because it can in some ways allow them to skirt their reserve requirements
It can do what now??
> and other banks - have a huge incentive to run their own "stablecoin"
Every bank can release their own version of Paypal too. Why would the network effect of JPMC overtake USDC when any regulated bank can become a USDC issuer? USDC is sitting at a 255MM market cap.
DylanBohlender|7 years ago
The general public's trust in JPMorgan is probably higher than their trust in any crypto company that has yet to exist for an entire decade.
JPMorgan - and other banks - have a huge incentive to run their own "stablecoin" creation/redemption business, because it can in some ways allow them to skirt their reserve requirements, while also possibly netting them a tiny operating profit if they sell newly-minted JPMC above the price they redeem them for (leading to profit on the spread).
smokeyj|7 years ago
It's handled by CENTRE who's founding members are Circle and Coinbase.. but the network will grow to include any compliant banking institution.
> because it can in some ways allow them to skirt their reserve requirements
It can do what now??
> and other banks - have a huge incentive to run their own "stablecoin"
Every bank can release their own version of Paypal too. Why would the network effect of JPMC overtake USDC when any regulated bank can become a USDC issuer? USDC is sitting at a 255MM market cap.