We are talking about the JPM Coin, the first cryptocurrency developed by a major US bank.
A digital token created by JP Morgan — one of US largest investment banks and financial services companies, headquartered in New York — to instantly settle transactions between clients of its wholesale payments business.
Its trials will start in a few months — and although only a small part of the bank’s payments will be carried out using the cryptocurrency in the beginning, it represents one of the first real-world applications of a digital currency in the banking industry.
How will it work?
Each JPM Coin will be redeemable for a single US dollar, much like stablecoins, so its value will not vary. The bank’s clients will receive the corresponding tokens after depositing dollars and may use them for a payment or purchase on the blockchain.
To what will it apply?
JP Morgan foresees three early applications for the JPM Coin:
- To international payments for large corporate clients, currently being carried out through wire transfers between financial institutions on old networks.
- For securities transactions — for instant settlements — avoiding the time gap between the settling of a transaction and the receiving of the payment for it.
- To large corporations, who use the bank’s treasury services, replace the dollars hold in subsidiaries across the world.
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