JPMorgan Chase officially launched JPM Coin (JPMD), a digital deposit token for institutional clients, signaling a big step forward as banks deepen their involvement in digital assets.
The digital currency represents dollar deposits held at JPMorgan, allowing for near-instant transfers using Coinbase’s public blockchain, Base, according to a Bloomberg report, citing Naveen Mallela, co-head of JPMorgan’s blockchain group, Kinexys.
This implementation allows payments to be settled in seconds, at any time and around the clock, rather than taking days and being restricted to business hours, and follows a months-long trial involving major players such as Mastercard, Coinbase and B2C2.
JPMorgan plans to eventually deploy the token on other blockchains and provide clients with access to JPM Coin and expand the token to multiple currencies pending regulatory approval.
The coin will even be accepted as collateral on Coinbase, highlighting its growing role in the crypto markets.
Deposit tokens are not stablecoins; rather, they are digital rights to funds already in customers’ bank accounts, designed to facilitate more seamless blockchain transactions. Unlike traditional stablecoins, which are backed by reserves and typically do not generate returns for their holders, deposit tokens can earn interest, offering an attractive option for institutional investors.
The launch builds on JPMorgan’s growing blockchain ambitions and is part of a broader wave of global financial firms, including Citigroup, Banco Santander, Deutsche Bank and PayPal, exploring digital tokens to speed up and reduce payment costs.
The development follows the US Genius Act, which governs stablecoins or digital tokens pegged to the dollar.
Other banks, such as Bank of New York Mellon and HSBC, are also developing similar deposit token solutions.
