Ripple CEO Brad Garlinghouse on JPM Coin: Other Banks Won't Use It

Brad Garlinghouse, the CEO of San Francisco blockchain startup Ripple, gave JP Morgan Chase qualified praise Wednesday for creating its own stablecoin, before dismissing the product's likelihood of adoption by other banks and questioning its usefulness.

During a fireside chat at the Chamber of Digital Commerce's D.C. Blockchain Summit in Washington, Garlinghouse said he thinks it's "great" to have major financial players like JP Morgan "leaning in."

But, he quickly added:

"That’s the only nice thing I’m going to say about this."

Indeed, Garlinghouse, whose company has been courting financial institutions to use its distributed ledger technology (DLT) for payments – including products that utilize the cryptocurrency XRP – promptly cast doubt on the prospects for the recently announced JPM Coin.

At another conference last week, Garlinghouse recalled, "This guy from Morgan Stanley was interviewing me, I said ‘So, is Morgan Stanley going to use the JPM Coin?’ And he said ‘probably not.’ So, well is Citi going to use the JPM Coin? Is BBVA? Is PNC? And the answer is no."

Hence, he suggested, a bank creating its own stablecoin risks recreating the very problems that DLT is supposed to solve.

"So, does that mean we’re going to have all these different coins? Are we back to where we are with lack of interoperability? I don’t get it."

Garlinghouse even started to sound like a blockchain industry critics when he wondered aloud what the point would be of tokenizing fiat currency when it remains on the books of a single entity.

"If you give them a dollar for deposits, they’ll give you a JPM Coin that you can then move within the JPM ledger. Wait a minute, just use the dollar!" he said. "I don’t understand. If you’re just moving within the JPM ledger, and it has to be dollar-to-dollar, one-to-one backing, I don't understand what problem that solves."

He wrapped up his comments about the subject on a diplomatic note, however, concluding:

"Now, back to my first answer, if it solves the first [problem] of JPM leaning into crypto, yay. That’s all I got."

Brad Garlinghouse photo by Nikhilesh De for CoinDesk