JPMorgan Launches Blockchain-Based Deposit Token JPM Coin for Institutional Transfers

Institutional Investors JPMorgan
JPM Coin represents dollar deposits at the bank, allowing users to send and receive money via Coinbase’s Base public blockchain.
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JPMorgan has officially launched blockchain-based deposit token JPM Coin for institutional clients. The token represents dollar deposits at the bank, allowing users to send and receive money via Coinbase’s Base public blockchain.

Naveen Mallela, global co-head of JPMorgan blockchain division Kinexys, told Bloomberg on Wednesday that the rollout will enable payments to process in seconds and 24/7, bypassing traditional banking delays.

JPMorgan is planning to expand the service to other blockchains, Mallela added. The move signals JPMorgan’s push to embrace digital assets into core institutional banking services.

JPMorgan Gives clients’ clients access to JPM Coin

The rollout comes after successful pilot tests with major firms, including Mastercard, Coinbase, and B2C2. Coinbase is reportedly set to accept JPM Coin as collateral for transactions and liquidity operations.

According to Mallela, the bank is considering making the token accessible to clients of its clients at a later stage. It will also expand to other currency denominations, pending approval from regulators.

Mallela described deposit tokens as “yield-bearing,” differing from stablecoins. They are digital claims on funds already sitting in client bank accounts, designed to facilitate easy blockchain transactions.

“We think that stablecoins get a lot of buzz, but for institutional clients, deposit-based products offer a compelling alternative,” Mallela said.

In June, JPMorgan launched the first banking token, “JPMD”, on the Coinbase Base network, following a trademark application for “JPMD.” JPMD is fully backed one-to-one by U.S. dollars and will initially be available to institutional clients only, the banking giant said at the time.

Banks Gear Up to Explore Digital Tokens for Speed Transactions

The announcement places JPMorgan among the growing list of blockchain-ambitious financial firms, including Citigroup Inc., Banco Santander, Deutsche Bank and PayPal that are already exploring ways to integrate crypto for quicker and cheaper transactions.

Bank of Korea, for instance, announced central bank deposit tokens with public blockchain networks in May, describing it as a “type of stablecoin.” The move was intended to drive away the influx of global stablecoins.

Other banks, such as BNY Mellon, has tested tokenized deposits to “modernize” its payments infrastructure and expand the use of blockchain in global finance

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