JP Morgan Introduces ‘JPM Coin’: The First US Bank-Backed Crypto
Updated: Jun 25, 2019
Wall Street giant JP Morgan Chase is launching its own cryptocurrency to increase settlement efficiency.
According to a February 14 CNBC report, the coin is dubbed as “JPM Coin” and is still under development, but the bank is set to initiate the real word trials within “a few months.”
Commenting on the development, Umar Farooq, head of J.P. Morgan’s blockchain projects, told CNBC: “So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction. The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this.”
Replacing Traditional Banking Technology
Initially, the token will be used to settle a small portion of transactions between clients of its wholesale payments business in real time.
Moreover, only major institutional clients of the bank with regulatory clearance will be allowed to use the token.
CNBC detailed that JPM Coin will be very similar to the stable coins present in the market as each coin will represent a single dollar. The bank will issue the token once the client makes a deposit and after the use of the token for payment or security purchase on the blockchain, the bank will destroy the coin returning the equivalent dollar value.
The bank sees three areas where the digital coin can be used – in international payments for large corporate clients, in securities transactions, and, finally, for major corporations that use J.P Morgan’s treasury services business.
“Money sloshes back and forth all over the world in a large enterprise. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it,” Farooq added.
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