JPMorgan Chase has officially launched JPM Coin (JPMD), a digital custodial token aimed at institutional clients, signaling a major breakthrough as banks deepen their involvement in digital assets.
The digital coin represents dollar deposits held at JPMorgan, enabling near-instantaneous transfers using Coinbase’s public blockchain, Base said, according to the Bloomberg report, citing Naveen Mallela, co-head of JPMorgan’s blockchain group, Kinexys.
This deployment allows payments to settle in seconds, at any time, 24 hours a day, rather than taking days and being limited to business hours, and follows a multi-month trial involving major players like Mastercard, Coinbase and B2C2.
JPMorgan plans to eventually deploy the token on other blockchains and give customers 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 crypto markets.
Deposit tokens are not stablecoins; Rather, they are digital claims on funds already in customers’ bank accounts, designed to facilitate smoother blockchain transactions. Unlike traditional stablecoins, which are backed by reserves and generally do not generate a return for holders, deposit tokens can bear interest, providing 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 lower 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.
