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This system is both accounting and transfers. All their other transfer systems (ACH, wire, Zelle) are run by third parties. As mentioned, we don’t know what the

This system is both accounting and transfers. All their other transfer systems (ACH, wire, Zelle) are run by third parties. As mentioned, we don’t know what the cost of building their own transfer system would be. In the long term, using someone else’s code for your bespoke project typically means you run up against “square peg round hole” issues so it’s likely they are just deferring engineering costs.

thaumasiotes 8y ago
> All their other transfer systems (ACH, wire, Zelle) are run by third parties. Those are systems for transferring money from JP Morgan to another bank. This system doesn't do that; it can only transfer money from JP Morgan to JP Morgan. That is much easier for JP Morgan to do, and they already have their own system for it.
- dkoston 8y ago
  That is wrong. Please re-read the article.
  - thaumasiotes 8y ago
    OK, I read the article. It says > the coin is only available to JP Morgan’s institutional clients without really expanding on anything. But, JP Morgan has an official announcement out about this, which is much more informative than this article is. It says: > How does it work? > In step 1, a J.P. Morgan client commits deposits to a designated account and receives an equivalent number of JPM Coins. In step 2, these JPM Coins are used for transactions over a blockchain network with other J.P. Morgan clients (e.g., money movement, payments in securities transactions). Finally in step 3, holders of JPM Coins redeem them for USD at J.P. Morgan. and it says: > Only institutional customers passing J.P. Morgan KYC can transact with these coins So, in order to make any transaction using JPM Coins, you need to be a JP Morgan customer who's passed their KYC checks. Parties who are not clients of JP Morgan cannot purchase, receive, or redeem coins. What part of what I said was wrong? What language from the article were you thinking of?
    - dkoston 8y ago
      > Those are systems for transferring money from JP Morgan to another bank. This system doesn't do that; it can only transfer money from JP Morgan to JP Morgan. In theory, anyone who passes KYC can transfer money in token format to anyone else on the network. There is a major issue with the network which is that it seems as if only JPMC can actually redeem the tokens for dollars.
      - thaumasiotes 8y ago
        > JPM Coins are used for transactions over a blockchain network with other J.P. Morgan clients Moving your JP-Morgan-client-only coins from your JPMcoin account held with JP Morgan to someone else's JPMcoin account held with JP Morgan is not conceptually different from moving USD from your JP Morgan dollar-denominated account to someone else's JP Morgan dollar-denominated account. In both cases, participating in the system in any way at all requires you to hold an account with JP Morgan, and the transfer that takes place "moves" currency from JP Morgan to JP Morgan. And, no surprise, JP Morgan already has all of the infrastructure in place to do transfers from one JP Morgan account to another JP Morgan account. > There is a major issue with the network which is that it seems as if only [J. P. Morgan] can actually redeem the tokens for dollars. That's not an issue. In theory, you hope for the cryptocurrency to be valid currency in its own right; you don't want people to think they need to redeem it. The issue is that you can't receive these coins unless you hold an account with JP Morgan. (You can't spend them either, but that's moot unless there's a way to get them in the first place.)
        dkoston 8y ago
        I think we are talking about the same issue in different ways. What’s clear is that this is either about internal efficiency at JPMC or marketing hype. This has no benefits for retail banking customers, unless JPMC provides new benefits (cheaper transfers). It certainly is not transformative to retail clients.

thaumasiotes 8y ago

> All their other transfer systems (ACH, wire, Zelle) are run by third parties. Those are systems for transferring money from JP Morgan to another bank. This system doesn't do that; it can only transfer money from JP Morgan to JP Morgan. That is much easier for JP Morgan to do, and they already have their own system for it.

dkoston 8y ago
That is wrong. Please re-read the article.
- thaumasiotes 8y ago
  OK, I read the article. It says > the coin is only available to JP Morgan’s institutional clients without really expanding on anything. But, JP Morgan has an official announcement out about this, which is much more informative than this article is. It says: > How does it work? > In step 1, a J.P. Morgan client commits deposits to a designated account and receives an equivalent number of JPM Coins. In step 2, these JPM Coins are used for transactions over a blockchain network with other J.P. Morgan clients (e.g., money movement, payments in securities transactions). Finally in step 3, holders of JPM Coins redeem them for USD at J.P. Morgan. and it says: > Only institutional customers passing J.P. Morgan KYC can transact with these coins So, in order to make any transaction using JPM Coins, you need to be a JP Morgan customer who's passed their KYC checks. Parties who are not clients of JP Morgan cannot purchase, receive, or redeem coins. What part of what I said was wrong? What language from the article were you thinking of?
  - dkoston 8y ago
    > Those are systems for transferring money from JP Morgan to another bank. This system doesn't do that; it can only transfer money from JP Morgan to JP Morgan. In theory, anyone who passes KYC can transfer money in token format to anyone else on the network. There is a major issue with the network which is that it seems as if only JPMC can actually redeem the tokens for dollars.
    - thaumasiotes 8y ago
      > JPM Coins are used for transactions over a blockchain network with other J.P. Morgan clients Moving your JP-Morgan-client-only coins from your JPMcoin account held with JP Morgan to someone else's JPMcoin account held with JP Morgan is not conceptually different from moving USD from your JP Morgan dollar-denominated account to someone else's JP Morgan dollar-denominated account. In both cases, participating in the system in any way at all requires you to hold an account with JP Morgan, and the transfer that takes place "moves" currency from JP Morgan to JP Morgan. And, no surprise, JP Morgan already has all of the infrastructure in place to do transfers from one JP Morgan account to another JP Morgan account. > There is a major issue with the network which is that it seems as if only [J. P. Morgan] can actually redeem the tokens for dollars. That's not an issue. In theory, you hope for the cryptocurrency to be valid currency in its own right; you don't want people to think they need to redeem it. The issue is that you can't receive these coins unless you hold an account with JP Morgan. (You can't spend them either, but that's moot unless there's a way to get them in the first place.)
      - dkoston 8y ago
        I think we are talking about the same issue in different ways. What’s clear is that this is either about internal efficiency at JPMC or marketing hype. This has no benefits for retail banking customers, unless JPMC provides new benefits (cheaper transfers). It certainly is not transformative to retail clients.