JPMorgan Chase & Co, the world’s largest bank by market capitalization, has begun deploying JPM Coin, a token representing deposits held at the bank.
According to a Bloomberg report, JPMorgan’s institutional clients now have access to JPM Coin. Naveen Mallela, the bank’s blockchain division co-lead, explained that the token represents US dollar deposits at the bank. It allows users to send and receive money on the Base blockchain, a platform developed by US crypto exchange Coinbase and endorsed by JPMorgan.
In mid-June, Mallela announced that a fixed number of JPMD tokens would be transferred to Coinbase on Base in the following days. This transfer was part of a pilot phase, which was planned to be followed by allowing Coinbase’s institutional clients access to the bank’s deposit token.
JPM Coin enables instant, 24/7 payment processing, offering a significant speed advantage over the typical times seen in the US banking system. This development follows JPMorgan's recent announcement with Singapore multinational banking group DBS regarding their collaboration on a blockchain-based tokenization framework to enable on-chain transfers between their respective deposit token ecosystems.
Not a Stablecoin
JPM Coin is classified as a deposit token. This means it represents a direct claim on a bank deposit and is a regulated liability of the issuing bank. This distinguishes it from traditional stablecoins, which are tokens issued by private entities and backed by assets to maintain their value.
JPMorgan is increasingly demonstrating its commitment to tokenization and blockchain technology, mirroring a broader trend within the US financial industry. In late October, JPMorgan’s private bank and asset management divisions initiated the first transaction on the upcoming Kinexys Fund Flow fund tokenization platform.
JPMorgan's Growing Involvement in Crypto
The firm has also expressed enthusiasm for the broader crypto ecosystem, extending beyond blockchain-based tokenization. In late October, reports indicated that JPMorgan was planning to allow clients to use Bitcoin (BTC) and Ether (ETH) as collateral for loans.
Earlier in the year, JPMorgan suggested that a Solana (SOL) ETF could attract between $3 billion and $6 billion in new investments, while an XRP (XRP) ETF was projected to garner $4 billion to $8 billion. The bank has also reportedly been developing plans to offer cryptocurrency trading services.
Furthermore, in October, JPMorgan informed its financial advisers that all clients would be able to invest in cryptocurrency funds. Prior to this, such products were restricted to high-net-worth investors with over $1.5 million in assets and an aggressive risk profile.