‘JPM Coin’: JP Morgan Announces World’s First Cryptocurrency Created by Bank

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‘JPM Coin’: JP Morgan Announces World’s First Cryptocurrency Created by Bank
Its big news as the world’s first cryptocurrency ever created by a banking institution is out there! Also, it’s not just any other bank but Wall Street giant JP Morgan launching its new cryptocurrency dubbed JPM Coin. The JPM Coin is a digital token which will be used by the banking behemoth to instantly settle transaction between the clients of its wholesale payments business.
According to the CNBC report, JP Morgan’s wholesale payments business currently moves over $6 trillion every day among corporations. The lender now plans to move a tiny fraction of this amount through its digital token JPM Coin. The publication also notes that the Wall Street bank will begin its trail in the next few months.
Preparing for the Blockchain Revolution
With the onslaught of blockchain technology, JP Morgan is currently preparing itself for the next FinTech revolution. The banking giant is experimenting with the use of blockchain for instant cross-border payments as well as for its corporate debt insurance business. Umar Farooq, head of J.P. Morgan’s blockchain projects said:
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction. The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this.”
Furthermore, Farooq stated three major use cased of the ‘JPM Coin’ digital token. This includes majorly cutting down on settlement times while replacing the wire transfers for global payments. Also, the token can be useful for securities issuance. Farooq added:
“Money sloshes back and forth all over the world in a large enterprise. 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.”
He concluded that JP Morgan has a big portfolio of banking as well as corporate clients across the globe. Thus, “Even if this was limited to JPM clients at the institutional level, it shouldn’t hold us back,” said Farooq. He also added that eventually, JPM Coin could find a place for mobile payments.
It is clear that with the launch of JPM Coin, JP Morgan wants to attain the first-mover-advantage in the banking space. Also, with over 80 percent of Fortune 500 organizations being their client, there’s a good chance for JPM Coin’s faster adoption.
Jamie Dimon’s Bitcoin Bashing
Well, we can’t forget the Bitcoin bashing by JP Morgan chairman Jamie Dimon that orchestrated a huge debate within the crypto community. Now, that same bank is testing a potential use-case of digital tokens. However, there would certainly be a difference in the modus operandi of JPM Coin and Bitcoin and other decentralized cryptocurrencies.
Cryptocurrencies are majorly decentralized with no control of regulatory agencies. On the other hand, the JPM Coin will have certainly undergone regulatory checks before being used by institutional clients. Also, the JPM Coin will function quite similar to stablecoin with its value redeemable by the U.S. Dollars. Hence, this won’t be a case of price driven by demand and supply.
CNBC further explains the use of JPM Coins saying “Clients will be issued the coins after depositing dollars at the bank; after using the tokens for a payment or security purchase on the blockchain, the bank destroys the coins and gives clients back a commensurate number of dollars”.
In the coming months, we expect more clarity on this matter from the Wall Street giant. However, it is now clear that banking institutions are no more averse to the concept of digital tokens.
‘JPM Coin’: JP Morgan Announces World’s First Cryptocurrency Created by Bank

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