JP Morgan is rolling out the first US bank-backed cryptocurrency to speed up payments.
In a move commentators may see as unlikely, the multinational lender will use its newly developed asset, dubbed “JPM Coin,” to increase settlement efficiency, initially within three of its operations.
Speaking to CNBC, Umar Farooq, who leads JPM’s blockchain focus, appeared buoyant on blockchain technology’s perspectives at the bank.
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,” he told the network:
“The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”
JPM Coin will initially focus on international settlements by major corporations, helping speed up transactions that currently take a day or longer using extant options such as SWIFT.
Author: Nathan Reiff / Source: Investopedia
JPMorgan Chase & Co. has officially become the first U.S. bank to launch its own digital token representing a fiat currency. Per a press release and interview issued on Valentine’s Day, the bank has announced the creation of JPM Coin, a blockchain-based technology which will facilitate the transfer of payments between institutional clients. The coin has important differences from preexisting cryptocurrencies like bitcoin, primarily because it is redeemable at a 1:1 ratio for fiat currency held by JPMorgan.
JPM Coin is essentially a tool to help with the instantaneous transferring of payments between some of JPMorgan’s clients. In order for an exchange of money between client parties to take place over a blockchain ledger, a digital currency must be used to facilitate the transaction. JPM Coin is the tool which helps to complete that process in a more efficient manner than traditional settlements.
JPM Coin itself is not money in the traditional sense. Rather, it is a digital token which represents U.S. dollars which are held by JPMorgan Chase. It maintains a value equal to one USD. Assuming that JPMorgan Chase deems the initial launch of JPM Coin to be successful, the bank has indicated its plans to use JPM Coin for additional currencies as well in the future.
The process by which clients will utilize JPM Coin is relatively straightforward. First, a client deposits a sum in a particular account and receives corresponding JPM Coins. Next, these coins can be used to facilitate transactions across a blockchain network and…