Largest Bank in the US, JP Morgan Chase, Unveils Cryptocurrency “JPM Coin”
JP Morgan has become the first US bank to create and test a cryptocurrency. “JPM Coin” is a blockchain-based system intended to supplant older technologies like SWIFT and wire transfer, providing faster settlement times for the bank’s institutional clients.
JP Morgan Chase is the largest bank in the US with a balance sheet with over $2.6 trillion in assets. According to statements released today on the bank’s website, JPM Coin is a stablecoin backed one-to-one by US Dollars held in accounts at JP Morgan Chase North America. According to the bank:
“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.”
Currently, JPM Coin is still in the testing phase, with trials set to begin in a few months according to CNBC. In response to whether regulators are supportive of the cryptocurrency, JP Morgan stated:
“As we move towards production we will actively engage our regulators to explain its design and solicit their feedback and any necessary approvals.”
Furthermore, all clients who use JPM Coin will be required to undergo a KYC and AML process to ensure regulatory compliance.
JPM Coin will be issued on Quorum, JP Morgan’s enterprise-focused version of Ethereum, and extended to other platforms. According to the bank, JPM Coin will be “operable on all standard Blockchain networks.”
Allegedly, JP Morgan has “always believed in the potential of blockchain technology” and has been “supportive of cryptocurrencies as long as they are properly controlled and regulated.” And, as one of the planet’s largest banks, JP Morgan is in a unique position to pioneer a regulated and large-scale blockchain implementation.
That said, JP Morgan has said that the new cryptocurrency is designed for business-to-business transfers and that the bank does not have plans to make the coin available to individuals at the time.
The move isn’t entirely surprising. As blockchain technology continues to develop, it is inevitable that large financial institutions begin leveraging the technology to improve their services.
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