The largest bank in the United States J.P Morgan has launched its first fiat backed Cryptocurrency – JPM Coin
JP Morgan is the first US bank to launch a Cryptocurrency. In a surprise move, the investment bank has launched a stablecoin like token which will be used anywhere from settling cross border payments to using the bank’s treasuries.
Head of JP Morgan’s Blockchain projects, Umar Farooq told CNBC:
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,”
The banking giant handles around $6 Trillion in daily transactions of which only a tiny portion would be conducted using the newly created JPM Coin.
“The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this.”
The coin, however, will only be available to its institutional clients who will be able to redeem actual dollars in exchange for JPM coins. According to their website, the token is issued on its own permissioned Blockchain called Quorum.
The JPM Coin will be issued on Quorum Blockchain and subsequently extended to other platforms. JPM Coin will be operable on all standard Blockchain networks.
Farooq highlights three early use cases for the token:
- International Payments – Large corporations transfer millions of dollars every day using wire transfers on the Swift network, which typically take days to settle but with the token real time almost instant settlements can be enabled
- Securities Transactions – Farooq claims that JP Morgan simulated a $150 Million certificate of deposit for a Canadian bank on the Blockchain, which was more efficient and faster.
- Replacement for dollars held in treasuries – The token could replace dollars held by subsidiaries of huge corporations across the world. Farooq says: “Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it.
JP Morgan’s CEO Jamie Dimon has been critical of Cryptocurrencies and has even called Bitcoin a ‘fraud’, but now enjoys the first mover advantage and aims to gain a significant market share in corporate payments.
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