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Is the Banking System a Fraud?

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There are many other loopholes to the working of banks in the economy, but for now, these should be enough to open your eyes to the banking system.

You’ve worked the entire four weeks until your bones were dry from fatigue, you spent sleepless nights working on a project or an assignment and even over worked your body to an unhealthy degree- at the end of it all, however, you have your paycheck in hand. You finally have your wage, or do you?

The bitter fact is that it’s not you but your bank that has received the wage. In our day to day lives we are dependent, more than anything on banks for the money that we earn- when it should be the other way around; that is, banks should be depending on us instead for the money that they offer to the world.

And when one pays close attention- the entire system appears to be absurd! How can a third party that had no role in the amount of work that we did and efforts that we put have a say in the amount of money we can withdraw and the number of times we can withdraw it?

Today we are here to unleash some facts about the banking system which will show to you how the whole banking system is a sham:

 

Are all banks broke?

Yes, this is no act of God, or a natural calamity or a tsunami- all banks from the beginning have been broke. After all, they have no money of their own- any assets that they appear to have were provided to them by their initial customers.

True, they earn small amounts of interest on the money that we deposit with them, but it is indeed not enough to give them amounts large enough, such as 10 lakh, which they can offer to a minimum 100 people at once. So where is the money coming from? Well, it’s all fall system that we will slowly unravel.

 

Fractional Reserve Banking

Now, the biggest fraud that banks can possibly play is that they go ahead and offer more money than they actually have and this is primarily known as Fractional Reserve Banking.

As mentioned earlier, banks have limited money supply- all the money that they have to offer is what we deposit with them so how come when a person applies for a large loan the banks are ready to give that money as though it was theirs. The sad fact is that banks are actually offering ‘your’ money to others when giving out loans- and the credit security they offer is not half as true as it would appear.

 

False Credit Creation

We will now see how the banks create false money in the economy. Supposing you deposited one thousand dollars with the bank; the next step by the bank would be to keep ten percent ($100) of it as cash reserve and use the remaining, $900 as money owned by the bank itself. So now the bank has your money, which is one thousand dollars for appearance’s sake and 900 dollars as its own money. Thus, the total money increases to 1900.

And now suppose you want your thousand dollars back- here’s what the bank will do- just like you deposited money with the bank, there are many others who deposited money with the same bank in a similar fashion, the banks will use a small percentage of the money deposited by various people and give it to you back as ‘your’ money.

This is all just a hollow scheme.

 

The Central Bank

Perhaps the most significant loophole in the banking system of the economy is The Central Bank and its activities and the biggest sham that it plays is the printing of money or deficit financing.

Whenever the money supply in the economy is falling, banks resort to deficit financing and print more money, but the actual amount of goods and services in the economy remains the same. So although now, instead of $100 you have $200, you cannot get an extra bag of rice because the total production was not increased only the paper money was.

 

Conclusion

Real rise in the economy occurs when the total production increases and not the total amount of money circulating in the market. There are many other loopholes to the working of banks in the economy, but for now, these should be enough to open your eyes to the reality of the banking world.

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Largest Banks Adopting Blockchain Technology

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The industry that is taking tremendous interest in Blockchain is the finance sector, especially the banks. They saw it as a competition.

The blockchain technology is prevailing for some years now but has entered the mainstream market in the last two years. As a matter of fact, for the last two years, the head of all sorts of cryptocurrencies has a valuation of $75 million, however, a bit of collapse is observed.

One sector of the industry that is taking tremendous interest in Blockchain is the finance sector, especially the banks. when blockchain surfaced, they saw it as a competition fearing they would automate control over the funds, but now they are warming up to the same technology.

 

Blockchain Receives Greenlight Among Banks

Banks and their employees have historically remained suspicious of how reliable blockchain technology for an industry like finance. However, that perspective has stirred dramatically in the last year, and they are making themselves familiar with the technology, also they are heavily enthusiastic concerning its possible uses.

Majority of the business administrators announce that blockchain is highly critical to their firm’s progress, and over the next three years, it is going to surpass over many functioning. The 2018 Consensus conference saw the developer and founder of FedEx’s, Frederick W. Smith said that Blockchain has the potential to ultimately transform business beyond boundaries. and edges.  

Large banks are performing substantial investments in varied initiatives including classified ledger technology.

 

List of some Banks Using Blockchain Technology

Let us have a look at some of the famous and global ranking banks who have bowed down to Blockchain. They are as follows

Santander:

The adoption of Blockchain will lead to a state where global banking sectors will be able to save more than $ 20 billion by the end of 2022. Santander has the same notion too. It was the first bank in U.K to utilize blockchain for developing international payments service. The devised a technology called One Pay FX which will enable customers to easily transfer money in between the Santander bank accounts in the continents of Europe and South America. Santander further conducted blockchain application for stockholder polling with JPMorgan Chase,  Broadridge, and Northern Trust.

 

HSBC:

The Hong-Kong Shanghai Banking Corporation has gone for a test before completely adopting the Blockchain technology. They have utilized a soybean shipment as a test for business sales and transaction. With the help of Dutch Bank ING and partnered with the Cargill, one of the foods and agricultural firm. HSBC has further used Blockchain technology and said the work was completed in 24 hours. It was the blockchain consortium R3 that HSBC laid their hands on.

 

JP Morgan Chase:

It will not be right if we whirled off reports, but JP Morgan Chase has a completely different unit for blockchain called Quorum. They have already tested a new application that can handle financial instruments and phantom-issues an amount of $150, each floating year with enormous deposits on the blockchain technology. Overall, with the help of blockchain, the banks are bestowing infrastructure between the participating factors. The issuers, dealers, investors, administrations, custodians will all be able to notice the golden truth behind the source for a debt instrument. This was the notion of JP Morgan Chase’s welcome to blockchain technology.

 

The Bank of Ayudhya:

It is Thailand’s 5th largest bank which managed a victorious pilot test last year in May to get the real-time foreign payments in conjunction with MUFG Bank (Japan) and Singapore’s Standard Chartered Bank, the multinational monetary services firm. The test supported a comparable force in which the bank accepted blockchain technology for money transfer among an oil firm in Thailand and its marketing ally in Laos.

 

China Construction Bank:

It has set out for promoting cross-border loans issuances for modest companies and everything was taken care of by Blockchain. The platform has till date generated over $251 million value of sales and transactions.

According to experienced investors, Blockchain technology can be an excellent way for international transactions. However, banks will not get enough space for charging tax and fees for transactions on foreign exchange in between a serious competitive pressure.

Due to the introduction of blockchain to the financial sector, it has been able to develop bases where banks can simplify and speed up cross-border debts, increasing speculation accuracy, authenticity, and shorter adjustment processes. Intelligent contracts have curated privileges with transaction processing by eliminating the middle man and will be used to develop reliability and remunerations operations.

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Alert: JP Morgan Coin: A threat to Bitcoin and XRP?

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The JP Morgan Coin is a centralized permissioned censorable blockchain based liquidity tool. People are saying that it should not be considered a cryptocurrency.

Jp Morgan, the bank run by Jamie Dimon is launching its own cryptocurrency. JP Morgan has $2.6 trillion in assets, $100 billion annual revenue, it moves more than $5 trillion in wholesale payments every single day and a quarter million employees. It is used by the investment banking crowd, asset management crowd, private banking, private wealth management, and the treasury & security services division. This tells us exactly for whom the JP Morgan Coin is designed for. These are the organizations that are going to be using it. The JPM Coin is a centralized permissioned censorable blockchain based liquidity tool. Many people are even saying that it should not be considered to be a cryptocurrency and it is just a bank coin.

 

The JP Morgan Coin:

The JP Morgan Coin is designed to be a stablecoin. They will be starting off with the USD and will be expanding to other key currencies over time. So it will be a global currency within their permission network. It will be providing real-time gross settlements rather than waiting for days for the payments to get cleared. The network participants can transfer tokenized fiat instantly, constantly and with full finality 24X7 which is a major improvement to how the things work currently. The previous model apart from bringing slow was also more prone to fraud and exposed to the old central bank failure and required multiple intermediaries across the interbank network.

The main use cases for the JP Morgan Coin will be international payments for sizeable corporate clients circumventing SWIFT and circumventing XRP. JP Morgan Coin may also be used for securities transactions. JP Morgan has previously tested a debt issuance on the blockchain and the token will allow institutional investors to buy debt issuance. Corporations could also use the JP Morgan treasury in order to take the place of their dollar holdings in their subsidiaries all over the world which will open more ways for the big corporate clients in order to move money back and forth.

The JP Morgan Coin will be on the quorum blockchain which is a permissioned version of Ethereum which JP Morgan has been using for some time. The quorum blockchain has already seen institutional use cases. Financial institutions can trust that only authorized parties can join their private ethereum network and that the transactions will be confidential. So the JP Morgan Coin is probably for a very small group of elites.

 

The History of JP Morgan:

There are dozens of fines that JP Morgan pays yearly all around the world for doing basically the same kind of things.

  • JP Morgan was fined $65 million for trying to vague the benchmark rate.
  • They were fined $1.6 million for failing to meet anti-money laundering and counter-terrorist financing laws in Hong Kong.
  • Citigroup and JP Morgan both had to pay a combined total of $182.5 million after being accused of violating anti-trust laws. Citigroup and JP Morgan allegedly the European Interbank offered rate.
  • JP Mogan was $135 million for improper handling of American Depositary Receipts.

In most of these cases, they are not actually found guilty of anything and they just settle. They don’t end up breaking any laws cause they just pay the huge amount of fine they are asked to pay.

After the announcement of the JP Morgan Coin, JP Morgan stocks have gone up because of JP Morgan’s clients, this is a welcome sign of innovation.

 

JP Morgan Coin vs XRP:

It seems that some banks want their own coin and not XRP which is the supposed to be the banker’s coin. They really don’t want XRP for one reason or the other. Although banks would not want to use the JP Morgan Coin as such they might just have their own coins in future such as Bank of America Coin or Bank of China Coin etc. But we have an interesting situation when it comes down to exchanging value between these banks because XRP is essentially a public ledger vs the JP Morgan Coin which is private. XRP has a permissionless ledger vs JP Morgan Coin has a permission ledger. JP Morgan controls the JP Morgan Coin but they do not control the XRP ledger and remember that the banks like to have control and maybe the other banks are also going to think like JP Morgan but there is still a lot of hope for XRP. JP Morgan Coin may not see very much interoperability between banks, therefore, they might need some kind of bridge and that bridge could end up being XRP.

 

Implications for Bitcoin:

There are not many implications for bitcoin at all. Most of the bitcoin enthusiasts have zero interest in things like the JP Morgan Coin. Bitcoin has amazing and unique value propositions and this is not a threat in any way to bitcoin. JP Morgan cannot control bitcoin it is really hard to manipulate the price of bitcoin whereas in case of JP Morgan Coin, they have direct control over it. The current rumors say that JP Morgan is going to use Bakkt for their clients who want to purchase, invest and hold bitcoin. So the JP Morgan Coin doesn’t have threat on bitcoin. Bitcoin is always superior in every way.

 

What are your thoughts on the JP Morgan Coin? Tell us in the comments section below.

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JP Morgan Stable coin: All you need to know about JPM coin.

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One of the largest financial banks of worked JP Morgan has launched is own digital asset, known as JP Morgan Stable Coin.

The world has seen a significant transition of cash currency to digital currency in the last few years. There has been a lot of innovations, new technology has evolved, new platforms have been developed etc. The competition in this space is very rigorous and this has impacted a positive future of digital currency.

In midst of all these inventions, one of the largest financial banks of worked JP Morgan has launched is own digital asset, known as JP Morgan Stable Coin. Since for the very first time any digital assets has been launched from such a big organization, most of the people are confused about the JP Morgan Stable coin. In this article, we will discuss 15 interesting points about JP Morgan Stable coin.

 

1. It is mainly designed to transfer fund across the globe instantly. Normally, it takes some time to transfer fund at international level but with the evolution of JP Morgan Stable coin, the value can be transferred easily and instantly, though it would be only for JP Morgan customers.

 

2, It is not a true cryptocurrency. As per most of the cryptoanalyst, there should not be any confusion about the fact that JP Morgan Stable coin is not a cryptocurrency. For a currency to be called as a cryptocurrency, it must be open and don’t need permission to be downloaded, rather it could be downloaded using a platform. JP Morgan Stable coin doesn’t qualify these criteria.

 

3. Not everyone would be using these coins at the initial stage right now. Only wholesale customers of JP Morgan bank would be able to access these JP Morgan Stable coin at this initial stage. Also, before using these coins, these customers would have to take permission from the bank itself. At this stage, you can’t use these coins without permission.

 

4. It works on a private and permission blockchain technology known as Quorum which developed by the JP Morgan itself with the help of another mega company of crypto space, Ethereum Enterprise Alliance. This technology is as easier as a Google sheet rather a bitcoin. Also, these stable coins will issue by the JP Morgan bank itself.

 

5. It is a direct competition to Ripple. Ripple which bags the third largest market cap in this crypto space has been solely providing the service of transfer of payments from one country to other at a very fast rate. Now after the evolution of such same service by JP Morgan, Ripple would be surely affected.

 

6. This JP Morgan Stable coin would finally be tied up with the dollars. Eventually, it is designed to enable the institutional customers of the JP Morgan bank to perform the instant transfer the payments among each other.

 

7. The JP Morgan Stable coin removes the trust problem even if for every minted stable coin, really one US dollar is held. This makes this project quite worthy and a bigger one as the above problem was haunting for a very long time for minting the stable coins.

 

8. Every person/organization that would be going to use the JP Morgan Stable coin would have to complete the process of verifications such as Anti Money Laundering (AML) and Know Your Customer (KYC). This would reduce the chances the fraud and scams in any kind of related transaction using JP Morgan Stable coin.

 

9. There would be a low risk of the closing of the coin issuing authority as in the case of JP Morgan Stable coin, the issuing authority is a financial entity having a yearly revenue of around $109 billion. This gives financial trust to people who are going to use these JPM coins.

 

10. JP Morgan Stable coin is presently designed for movement flows of one business to other business. As per one of the official, it would be made for individual use on the analysis of various factors like user response, efficiency profit, and cost-savings.

 

11. It will be under the supervision of high-quality securities and robust regulators and norms of the JP Morgan Bank which make it more secure and trustworthy digital coin as compared to other digital coins.

 

12. It is the first time in the history of United States banking that any such big bank has created and successfully tested a digital coin representing a fiat currency, dollar. JP Morgan became the first United State bank to achieve this milestone by creating this JP Morgan Stable coin.

 

13. The CEO of JP Morgan has once thrashed his opinion about the crypto world and bitcoin. He had used words like fraud and stupid saluting crypto coins. Now, as his bank announced the digital coin, most of the crypto world critics are slamming him and calling this newly launched JPM coin as a weak and fraud competitor to bitcoin.

 

14. With the evolution of JP Morgan stable coin, the clients would be able to use this coin to replace the US dollar that they have in their bank account to other similar accounts across the world. This will allow them to transfer the money with greater fluidity.

 

15. People must not be confused that JP Morgan Stable coin because of it, not a cryptocurrency, it is not decentralized, it is not open as well as it is not borderless. As per the officials of JP Morgan, it is a stable digital coin for replacing dollars and for fast payments.

 

15th February 2019 was a huge day for the crypto and digital world. The announcement of JP Morgan Stable coin set up a new milestone for instant payment across the world and the replacement of cash currency. It has promised a lot of things, let us see whether in future it is able to fulfill all its promises and give a tough competition to Ripple.

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