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June 2014

Could Consumers Use the JPM Coin One Day? Maybe

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JPM Coin

JPM Coin

JPMorgan Chase held their annual investor day yesterday. The company’s CEO, Jamie Dimon, was involved in a question-and-answer session and answered a few questions about the bank’s latest venture, the JPM Coin. The world’s first bank coin was originally meant for cross-border remittances, but it seems the bank may have other ideas for it down the road.

JPM Coin for Consumer Use?

During his Q&A session, Dimon explained that he believes the coin could be used in various sectors of the financial industry. “JP Morgan Coin could be internal, could be commercial, it could one day be consumer,” said the CEO.

Two weeks ago, the US major bank announced the news of its JPM coin. It was a shock to much of Wall Street and the cryptocurrency community. Dimon has been a long-time critic of Bitcoin and has even gone as far as calling the digital currency a fraud.

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When the news was released, critics began immediately chiming in—including Ripple’s CEO Brad Garlinghouse. Garlinghouse feels that if every major bank were to adopt its own bank coin, it would make the world’s financial system far more flawed than the current one using SWIFT. The new JPM coin would be in direct competition with Ripple and its underlying cryptocurrency XRP. Ripple, via XRP, does exactly what JPMorgan is trying to accomplish.

Now, JPMorgan wants to expand the coin’s use far beyond what was originally released. From the original announcement, JPM coin was designed to settle transactions between clients of its wholesale international payments business. The blockchain, they believe, will speed up this process.

Currently, the digital currency is being tested in a trial run with a few corporate clients, as well as internally in the bank. At this time, consumer use of JPM coin seems in the idea stages, but if major banks start making their own stable coins, the idea could be pushed further.

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Coinbase Launches New $2 Million USDC Bootstrap Fund

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Coinbase

Coinbase

Coinbase, a leading crypto trading platform, has announced a new $2 million USDC fund to further develop decentralized finance (DeFi) projects.

Difference Between Bootstrap Fund and Coinbase Ventures

The initiative is to be called the USDC Bootstrap Fund and will see $1 million USDC invested in both Compound, a money market protocol, and dYdX, a margin trading protocol and open trading platform for crypto assets. The fund differs from Coinbase Ventures, which invests in startups and takes an equity stake, in that it will add to the protocols’ lending pools and return interest when counterparties borrow from it and subsequently reinvest the accumulated interest back into the pools.

What is DeFi?

Decentralized Finance, or DeFi for short, is essentially the implementation of traditional financial tools but built on the blockchain. Sometimes referred to as open finance, which is more encompassing of the focus on financial products, is simply the way to refer to the use and availability of financial products, such as lending and investing, but with crypto assets rather than traditional monies. So, as these financial products are integral components of traditional economies, it’s easy to see why Coinbase is eager to further the growth of these services digitally.

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The biggest barrier to growth for DeFi protocols is attracting demand for borrowing. By using USDC, which is a stablecoin powered by Ethereum, Coinbase hopes to drive down interest rates to stimulate demand. Zhuoxun Yin, head of development at dYdX, said “as soon as we invest, the interest rate goes down in the pool itself. But then, what we have seen so far, is largely that borrowers come in and borrow. So the rates have been largely coming back to where they were before.”

Coinbase has said its primary motivation for establishing this fund is to make their products safer, more reliable, and accessible than existing financial products. Last month, Coinbase strengthened its crypto custodian empire by acquiring XapoBusiness.

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Litecoin Continues Its Robust Performance, Hits New 52-Week High

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Litecoin

Litecoin

In the last five months, Litecoin (LTC) has performed exceptionally in the cryptocurrency market and has grown 3.5 times. On Monday, Litecoin’s price grew to its highest level in the last 12 months, rising to $128.07. The last time the price of the coin came close to that was last year on May 23 when it traded at $126.

LTC Performing Well Despite Market Fluctuations

Currently, Litecoin is defying odds and continues to perform well despite the current market fluctuations. There has been mass adoption of Litecoin that is driven by the growing usage of Litecoin Onchain that may further drive the value of LTC. The growing trend of Litecoin is a result of a combination of partnership and the growing popularity of the coin’s platform.

According to recent price action, LTC is surging to a higher value, and currently, it is up by over 30% since June 4 when it traded at $97. Over the same period, the world’s leading cryptocurrency by market share, Bitcoin, has only gained 7%.

The outperformance of the coin is likely a result of the mining reward halving that is expected in the next two months on August 8. The mining reward on the Litecoin blockchain is expected to be halved to 12.5 coins per block from 25 coins.

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Litecoin to Replicate 2015 Performance?

In the last three months before the previous reward halving that happened back on August 25, 2015, the cryptocurrency rallied by over 500%. The price increased from $1.50 in May to a high of $7.00 by July 2015 before finally dropping back to $3.00 after halving. Based on the previous trend, the cryptocurrency will continue gaining in the next four weeks before experiencing a stint of profit taking prior to the August 6 event.

In the last five days, the value of LTC has shown tremendous growth after the coin leaped from $98.86 to around $121.12, and currently, Litecoin is trading at $116.57. The coin is expected to exhibit the bullish trend in the coming months and could reach $150 by the end of the year.

What do you think?

Featured image: DepositPhotos © GekaSkr

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Chinese Cryptocurrency is Not Coming Anytime Soon, Says Reports

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Chinese cryptocurrency

Chinese cryptocurrency

Ever since Bitcoin and other cryptocurrencies became far more mainstream following the remarkable rally in 2017, there has been a lot of talk about large institutions getting into this space. For instance, banking giant JP Morgan came up with its own digital coin last year. However, in 2019, a bigger piece of news came to the fore.

It emerged that the Chinese central bank, the People’s Bank of China, was going to launch its own digital asset. It goes without saying that this is a major development in the history of cryptocurrencies, and, naturally, there is a lot of excitement about the Chinese government getting into space in such a big way.

Ease of Speculation

Yesterday, it emerged that the Chinese central bank was readying to launch the cryptocurrency in November this year. However, the speculation was dismissed by the Chinese newspaper Global Times, which is well known for being close to the government. The newspaper sent out a tweet through its official Twitter account and stated, “Refuting media reports of launching a state-backed cryptocurrency in the coming months, #China’s central bank termed them as ‘inaccurate speculation.’” The announcement put cold water on all the speculation that has gone on regarding the cryptocurrency over the recent weeks.

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Throughout the course of August, speculation has been rife that Chinese cryptocurrency was going to be launched at some point in November. At the start of August, the People’s Bank of China stated that the development of the digital currency had been accelerated.

Yesterday, several reports emerged in which it was stated that the central bank was going to distribute the coins among China’s biggest financial institutions in order to ensure that it is distributed efficiently across the vast population. Although it is true that no date has yet been given regarding the launch, it is fairly clear that the whole thing has probably been deferred for now.

Featured image: DepositPhotos © Alan

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