JPMorgan Chase Developing New Digital Currency
A New Digital Deposit Token
The largest bank in the US, JPMorgan Chase & Co, is reportedly developing a new type of digital currency that can accelerate settlements and international payments, according to an anonymous source familiar with the matter.
The bank is exploring the use of a blockchain-based deposit token, which would act as a transferable digital currency representing a deposit claim. While the infrastructure for the payment system is already in place, regulatory approval is required before the token can be developed. If approved, JPMorgan could launch the product for its corporate clients within a year.
“Deposit tokens bring plenty of potential benefits, but we also appreciate that regulators would want to be thoughtful and diligent before any new product gets developed and used. Should that appetite develop, our blockchain infrastructure would be able to support the launch of deposit tokens relatively quickly.”
The deposit token will expand JPMorgan’s blockchain initiatives, which already include the JPM Coin. However, unlike JPM Coin, the deposit token will enable easy money transfers to clients of other banks and facilitate the settlement of tokenized securities issued on the blockchain.
Deposit Tokens Could Transform Financial System
Deposit tokens are digital coins that represent a claim against a commercial bank and have the potential to transform the traditional financial system. By utilizing blockchain technology, transactions can be processed instantly, leading to faster settlements and reduced transaction costs. The new system will also integrate with the bank’s existing compliance systems to ensure regulatory compliance and reporting.
The deposit token will initially be denominated in Dollars but could expand to other currencies with approval from relevant regulatory authorities. This potential launch comes at a time when there is speculation that US regulators may be favoring established Wall Street firms in their actions against crypto companies.
Expanding Use of JPM Coin
JPMorgan is the first major US bank to launch its own digital token for real-world use. The bank is also looking to expand the usage of the JPM Coin, a blockchain-based settlement token that acts as a payment rail and deposit account ledger. Since its launch, JPM Coin has facilitated transactions worth over $300 billion, making it a prominent example of blockchain technology adoption by a traditional financial institution.
Last year, JPMorgan revealed that clients had started using its cryptocurrency to settle payments globally in an instant. However, the coin is currently only available to corporate clients that have undergone rigorous regulatory checks.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
