Goodbye dollar, Move over Bitcoin, JPMorgan may be preparing to launch its own virtual currency
Virtual currencies offer many benefits over traditional monies.
JPMorgan Chase has applied for a patent for a system that resembles the Bitcoin payment system. The system could enable JPMorgan to launch and manage a virtual currency similar to Bitcoin.
Virtual transactions are gaining steam. More people around the globe are shopping online, finding virtual shopping to be a better experience than battling crowds. Firms such as Amazon, Google, Apple, PayPal, eBay, Groupon and more, are doing a good job of meeting demand for virtual shopping.
Privacy is also a concern, as are fees. Transactions in conventional currencies are frequently fee-based with nickel-and-dime penalties for using them. Payments for major expenses, such as auto loans, are sometimes processed via third parties, which costs an additional fee on top of the payment itself. Many people find this annoying and will seek to avoid such fees if they can.
Conventional transactions also create records and trails which undermine privacy. Some people prefer the internet for their activities because it is somewhat anonymous. Adding anonymity to transactions will encourage more shopping online.
The age of the virtual currency is coming and JPMorgan's patent filing is a clear sign that the world's financial powers see value in virtual currencies and are positioning themselves to be on the right side of history-and profits.
Earlier this year, the price of a single Bitcoin rose to $1,240, adding value to the virtual currency and attracting investors to the currency. Banks would be remiss if they missed out on the action, which can be profitable. Of course, easier than penetrating an established market is to create one's own. JP Morgan could use its system to create its own virtual currency.
If anything will undermine virtual currency, it is not the rejection by banks, which were never necessary to in the first place. Instead, it will be copycat start-ups that threaten to flood the world with so many virtual currencies that some fail and people grow skeptical of them. Certainly, scams, schemes, and other questionable activities will follow.
Already, Bitcoin has a reputation for use in black market transactions. Such is the dark side of anonymous transaction. However, these markets will flourish even with traditional monies, as they always have. The strength of virtual currency-or any currency for that matter, is public acceptance.
If JPMorgan can launch its own virtual currency, then there's a good wager to be made that others will soon follow.
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