The Ripple Killer? IBM in Talks with Two Major US Banks to Create Cryptos
Ripple is under serious threat as IBM joins forces with major banks to issue cryptocurrencies. In a Bloomberg report, IBM revealed it was in talks with two “major US banks” to issue a cryptocurrency for internal and remittance payments.
The IBM initiative, which is powered by Stellar’s blockchain, is a huge threat to Ripple. Ripple has always positioned itself and its associated cryptocurrency XRP as the future standard for banking remittance payments.
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It’s official: IBM is open for business in payments with World Wire in 72 countries and 47 currencies. Support for stable coins and cryptos. Come see my keynote with @JedMcCaleb @Money2020 in Singapore this morning https://t.co/8XD3mgOhqN https://t.co/PMyc1X9KIH #IBMBlockchain pic.twitter.com/NMIgfZunuQ
— Jesse Lund (@jesselund) March 18, 2019
“Major US Banks” Follow JP Morgan’s Cryptocurrency Lead
JP Morgan sent shockwaves through the crypto community when it launched its own cryptocurrency, JPM Coin in February. JPM Coin is a stablecoin, pegged to the value of a dollar. It will be used to instantly settle transactions in the bank’s payment network, reduce transfer times, and ultimately reduce friction in international transfers.
— CCN.com (@CCNMarkets) February 16, 2019
After the announcement, other major banks in the US jumped on the bandwagon. Jesse Lund explained:
“We have received interest on the heels of JPM Coin… [The two major banks] “reached out to us after that announcement.”
Whether good or bad, JP Morgan has kicked off a new movement in blockchain: bank-issued digital currencies.
Six Other Global Banks Will Issue Cryptos Through IBM
“RCBC is pleased to be an early innovator with plans to issue our own Peso stable coin on [IBM’s] World Wire, pending final approval from our regulators.”
Where is Ripple?
Ripple already knows the answer. Convincing banks to trust a cryptocurrency out of their control is a mammoth challenge. Ripple calls it the “800-pound gorilla.” Banks aren’t ready to relinquish control. It explains why only a tiny handful of payment providers are using XRP to settle payments.
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
Stellar Poised to Oust Ripple?
While IBM grabs the headlines, don’t overlook Stellar’s role in this new movement. IBM’s Blockchain World Wire network runs on Stellar and will even use Stellar’s lumens to settle some transactions. Explaining the choice to use Stellar, Lund explains:
“Personally, I think cryptocurrencies could very well serve as a viable settlement instrument. We’ve started with Lumens, which is the native asset of the Stellar network, but we already have the capacity to introduce other cryptocurrencies that could include Bitcoin or Ether.”