Just as mobile wallets are driving adoption of digital currencies and digital assets, banks are going to drive adoption of stablecoins, digital currencies tethered to central bank currencies, aka stablecoins. Last week it was JPMCoin. The big news this week was IBM's offering of a Blockchain network and the ability for traditional banks to issue stablecoins based on dollars or central bank currencies. The notion that the private banking system, though a private blockchain, can recreate the resilience of bitcoin is laughable, but it's being taken completely seriously by banks, including JPMorgan and digital businesses such as Facebook. Of course, this is the old way: issue your own sovereign. As Aaron Brown writes in Bloomberg, JPMCoin is the "wildest big bank idea in years", as JPMorgan seeks first-mover advantage. But as Brown acknowledges, JPMorgan is simply building on top of open source technology that is widely available for free, while trying to retain control of the currency and the network. This goes against all of the principles at the heart of the bitcoin experiment. Indeed, the need for a digital currency is that strong that Mark Zuckerberg, king of Facebook, is trying to mash WhatsApp, Instagram and Facebook Messenger together at rapid speed to create the basis for a FacebookCoin. Read more here on why centralised coins such as JPMCoin are not cryptocurrencies.
As you know, dear reader, we are big fans of Twitter here at Lafferty News. Look, there's Jack Dorsey in the Blue House this week meeting South Korean president Moon. These people look like they actually have a clue about what's going on. So refreshing. Dorsey yesterday announced that Square is hiring bitcoin engineers to contribute to building the bitcoin infrastructure. "Square is hiring 3-4 crypto engineers and 1 designer to work full-time on open source contributions to the bitcoin/crypto ecosystem. Work from anywhere, report directly to me, and we can even pay you in bitcoin!" Dorsey has long advocated the use of a digital currency for the internet, but has shown no desire to issue a TwitterCoin, advocating instead for the use of bitcoin, and pushing the Lightning Newtork. (Dorsey is an investor in Lightning Labs.)
At what point does a business look at itself in the mirror and decide — on seeing, for example, an airplane — and think, 'you know what, I look like a finance company'. Earlier this week we reported on the ambitions of Uber, Grab and GoJek — among other apps — to get into financial services. But those aren't the only transport businesses looking for a new market. Air Asia has decided that it is now a data-rich platform and founder Tony Hernandes wants to take on the banks. "He has started with a foray into the payments space with his new venture, BigPay, with ambitions of making it a digital bank that will pay, lend and remit," he told Money2020 Asia. "We carry a hundred million people and are more than just an airline. AirAsia is a powerful, data-rich digital platform. BigPay is our version of a challenger bank."
Subscribe to the Lafferty Daily BriefingSIGN UP
© 1981-2019 Lafferty Group
Toll-free: +44(0) 800 772 3849
83 Victoria Street