Banking giant, JPMorgan which has been dabbling in blockchain technology for quite some time now, is on its way to introduce its very own cryptocurrency, the JPM Coin. The main aim of this will be to take payments in the financial sector to a whole new level.
JPMorgan Chase, one of the world’s largest and most famous banks, has revealed its plans to run tests of its own cryptocurrency, JPM Coin. When launched, this first digital coin ever created by a US bank may transform the entire payments business and enhance settlement efficiency. This announcement came as a surprise to many.
As an effort to push and utilize innovative blockchain-based technology for the bank’s payments business, the bank is set to start using its digital coin over the next few months, in test mode.
The initial stages of the test will involve only small parts of the wholesale transactions
Each JPM Coin will be redeemable for one U.S. dollar, which makes it a stablecoin and protects it from volatility. After going through the payment system, the coins will be destroyed, and the bank will deposit the clients’ accounts with the corresponding amount of USD.
Umar Farooq, the Head of JPMorgan’s blockchain project, highlighted the enormous potential of this industry and said,
The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.
The coin’s main focus will be on international payments performed by big institutional clients and will also be used for securities transactions. It will enable the bank to issue debt on the blockchain and allow large institutional investors to buy the issuance with JPM Coins instantly. The coins will also be handy for J.P. Morgan’s treasury services offered to big corporations, where they will replace multibillion-dollar flows.
As of now, the new coin will be available for institutional clients only. However, if the tests succeed, retail investors may also tap into it over time.