JPMorgan Chase & Co. — the world’s biggest bank by market capitalization — has begun deploying a token representing deposits held at the bank, called JPM Coin.
According to a Wednesday Bloomberg report, JPMorgan’s institutional clients now have access to the JPM Coin. The bank’s blockchain division co-lead, Naveen Mallela, told Bloomberg that the token represents US dollar deposits at the bank and allows users to send and receive money on the blockchain created by US crypto exchange Coinbase, called Base, a platform endorsed by the bank.
In mid-June, Mallela announced that a fixed number of JPMD tokens would be transferred to Coinbase on Base in the following days. The transfer was part of a pilot phase that was followed by allowing Coinbase’s institutional clients to access the bank’s deposit token. Still, a spokesperson for the bank told Cointelegraph that the institution plans to add support for more public blockchains in the future.
JPM Coin enables instant, 24/7 payment processing, which is significantly faster than the typical times seen in the US banking system. The news follows this week’s announcement by JPMorgan and Singapore multinational banking group DBS that they are developing a blockchain-based tokenization framework to enable onchain transfers between their deposit token ecosystems.
A JPMorgan spokesperson said the initiative aims “to enable the seamless exchangeability and settlement of tokenized deposits across both public and permissioned blockchains, to set a new standard for the industry. The representative also told Cointelegraph that “it can be transferred for peer-to-peer payments among approved listed entities” and that “there are no plans to offer JPM Coin to retail clients at this time.“
The bank’s spokesperson noted that JPMorgan plans to issue JPM Coin in other currency denominations in addition to the US dollar. The firm also “already trademarked JPME for EUR-denominated deposit tokens.”
The JPMorgan Chase building. Source: WikimediaRelated: Qatar bank taps JPMorgan’s blockchain for faster US dollar payments
Not a stablecoin
JPM Coin is a so-called deposit token, meaning it represents a direct claim on a bank deposit and is therefore a regulated liability of the issuing bank. This is the primary distinction between this type of token and traditional stablecoins, which are issued by a private entity and backed by assets to maintain their value.
Much like the broader US financial industry, JPMorgan appears to be doubling down on its commitment to tokenization and blockchain technology. At the end of October, JPMorgan’s private bank and asset management divisions initiated the first transaction on the forthcoming Kinexys Fund Flow fund tokenization platform.
JPMorgan bets on crypto
The company also showed enthusiasm toward the broader crypto ecosystem, not just blockchain-based tokenization. In late October, JPMorgan was reported to be planning to let clients use Bitcoin (BTC) and Ether (ETH) as collateral for loans.
Related: UK Finance pilots tokenized sterling deposits with six major banks
In mid-January, JPMorgan suggested that a Solana (SOL) ETF would attract $3 billion to $6 billion, while an XRP (XRP) ETF would garner $4 billion to $8 billion in new investments. The bank was also recently reported to be developing plans to offer cryptocurrency trading services.
Also in October, JPMorgan informed its financial advisers that all clients will be able to invest in cryptocurrency funds. Until then, advisers were restricted to offering such products to high-net-worth investors with over $1.5 million in assets and an aggressive risk profile.
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Source: https://cointelegraph.com/news/jpmorgan-launches-deposit-token-base-blockchain?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
