After all the hoopla following the advent of the “JPMCoin”, banking executives now believe that the time is right for partnership and cooperation with all things crypto. The apparent flip came as a surprise during a nationally televised sequence of Squawk Box on CNBC, featuring an interview with JP Morgan’s Global Head of eCommerce Solutions Ron Karpovich.
Ron seemingly did a 180-degree pivot on how his bank views both cryptocurrencies and the blockchain technology that supports their development, proclaiming that “more partnership instead of competition” is needed between banks and crypto related companies going forward.
According to one report:
It’s no secret that the executives sitting at the top of JPMorgan Chase – one of the largest banks in the world – are not the biggest fans of Bitcoin and other similar cryptocurrencies. Although the bank’s distain towards the nascent technology initially appeared to be genuine – and possibly rooted in fear – it now appears that they are, in fact, bullish on the tech – as long as they are the ones controlling it.
Karpovich delivered a very compelling message, denoting first the low-margin nature of the payment industry, that change will always flow to newer, better, and cheaper ways to do things, and that banks and crypto companies need to work together:
Ultimately behind the scenes, they [crypto innovators] are going to have to use a bank to move funds. There’s more partnership instead of competition in that space. When it comes to margins and capabilities — payments is never something that grows in margin, nobody wants to pay for a payment. That’s one of the hardest parts of this process: you have limited resources in the capability to sell, so you need highly efficient and large players.
Bankers, however have done their homework and determined that there are definitely benefits to be had, if one employs distributed ledger technology appropriately:
There’s a difference between trading a cryptocurrency that’s in the market that’s ubiquitous, versus using the technology to enhance your payment infrastructure. We look at the technology as being a means to doing things faster and cheaper: every CEO would like to make things faster and cheaper. So from that standpoint I think it represents a buy into the concept of using blockchain.
Karpovish’s comments come after the press has followed for years the early day’s crypto zealot rant that cyrptocurencies would replace traditional banks in the long term. From that respective, banking executives could only react negatively in response, while their development teams were busy in the background trying to determine if there was any true value to their institution in pursuing this new wave of innovative technology. The result of this research has given rise to major banking development teams coming forward to endorse the use of blockchain technology in their mainstream operating platforms.
While crypto enthusiasts have demeaned the concept of the “JPMCoin” as not being a true cryptocurrency, banking executives have been quick to point out that consumers may never realize from their individual banking experiences that something has changed from a technology standpoint. What consumers will see is a more efficient process that is both cheaper and quicker, all good things when trying to sell cross-border payment services on a global basis.
Karpovich concluded that:
I think ultimately you’ll find that the technology behind the scenes will be blockchain, I don’t know that you’ll notice anything as a consumer in that space. I think that you’ll still continue to use the payment type that you prefer, be that a wallet, a card, or a bank account.