JPM Coin marks institutional foray into crypto
First U.S. bank to create a digital coin for a fiat currency
J.P. Morgan this month became the first U.S. bank to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional accounts.
JPM Coin is a digital coin designed to make instantaneous payments using blockchain technology. Exchanging value, such as money, between different parties over a blockchain requires a digital currency, so J.P.Morgan saw a need to create the JPM Coin. The coin will always have a value equivalent to one U.S. dollar, so when one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time. Over time, JPM Coin will be extended to other major currencies, but the product and technology capabilities are currency agnostic.
On the subject of cryptocurrencies in general, Umar Farooq, head of Digital Treasury Services and Blockchain, commented, “We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators. Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.”
The JPM Coin will be issued on Quorum Blockchain, an enterprise iteration of the Ethereum blockchain, and subsequently extended to other platforms. JPM Coin will be operable on all standard Blockchain networks.
Enterprise Ethereum is being adopted Companies, governments and future-oriented organisations around the world to increase efficiency, reduce the cost of trust and open up new opportunities for creating value.