Global investment bank JP Morgan rolls out JPM Coin, a deposit token for institutional clients. The deposit token runs on Coinbase’s BASE blockchain, enabling 24/7 instant USD transfers. Mastercard, Coinbase, and B2C2 are also involved in the functioning of the crypto-native technology.
The JPM Coin also operates on the Kinexys network, which is the JP Morgan bank-led next-generation financial blockchain. The global bank said in a statement that the development is “a step toward faster, yield-bearing digital payments.”
Currently, the JPM Coin services are available for institutional clients of the bank only. However, Naveen Mallela, Global Head of the Blockchain Division Kinexys, said that the bank could expand the services to other blockchains and currencies. The bank’s Kinexys network already handles close to $3 billion worth of transactions on a daily basis.
“The bank plans to make the token accessible to clients of its clients at a later stage and expand to other currency denominations, pending approval from regulators,” Mallela said. “It also intends to expand to other blockchains,” he added. Therefore, JP Morgan’s JP Coin could soon be made public for retail traders. The timeline of the launch is unknown.
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JPM Coin: What is ‘Deposit Token’, Which JP Morgan Launched For Institutional Clients?
JP Morgan’s JPM Coin, a deposit token, is a digital version of money that is already sitting in a traditional bank account. Its issuance is regulated by the bank, and is completely backed by customer deposits (in this case, institutional deposits). Every dollar sitting in the bank account would directly represent a token of the real funds.
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Similar to stablecoins, it also maintains a 1:1 ratio value, but JP Morgan’s JP Coin falls under the banking rules. “We think that stablecoins get a lot of buzz, but for institutional clients, deposit-based products offer a compelling alternative. These can be yield-bearing,” Mallela said. In short, a digital asset from a bank account is called a deposit token.