JPMorgan Expands Blockchain Efforts With JPM Coin

J.P. Morgan Chase has reportedly introduced a deposit token known as JPM Coin for institutional customers.

That’s according to a report Wednesday (Nov. 12) by Bloomberg News, which notes this move is part of a wider push by financial institutions to expand their digital asset business.

The token, which represents dollar deposits with the bank, lets users send and receive money using the Base blockchain, affiliated with Coinbase, Naveen Mallela, global co-head of J.P. Morgan’s blockchain division Kinexys, told Bloomberg in an interview.

This lets payments process within seconds and on a 24/7 basis, instead of days and confined solely to business hours.

The report says the launch follows a trial run of JPM Coin conducted in partnership with companies like Mastercard, Coinbase and B2C2. J.P. Morgan plans to eventually open the token to its own clients’ customers and expand to other currency denominations and other blockchains, Mallela said.

As Bloomberg notes, the launch is happening at a time when financial institutions such as Citigroup, Santander, Deutsche Bank and PayPal are experimenting more with digital assets. It comes in the wake of the GENIUS Act in the U.S. which regulates stablecoins, another increasingly popular type of digital currency.

As covered here last year, deposit tokens are digital representations of traditional bank deposits, issued by regulated financial institutions and backed 1-to-1 by fiat currency held in reserve.

“Unlike cryptocurrencies such as bitcoin or ethereum, which are decentralized and often subject to volatility, deposit tokens offer stability and reliability by ensuring each token corresponds to a specific amount of fiat currency,” PYMNTS wrote. “This backing by real-world assets provides a layer of trust and security that is necessary for widespread adoption.”

The main appeal of these tokens, that report added, comes from their stability. Each token is backed by fiat currency, giving them the same reliability as traditional bank deposits. This stability is critical for mainstream financial transactions and could help ease concerns about the volatility seen in cryptocurrencies.

And because deposit tokens are issued by regulated banks, they adhere to the same stringent regulatory frameworks as normal banking services. This compliance provides assurance that deposit tokens can be trusted by both consumers and businesses, addressing one of the obstacles to the wider adoption of digital currencies, PYMNTS wrote.

“We think that stablecoins get a lot of buzz, but for institutional clients, deposit-based products offer a compelling alternative,” Mallela told Bloomberg. “These can be yield-bearing.”