• 6 hours Gold Prices Surge Above $1,800
  • 23 hours Chinese Stocks Soar On Bullish Economic Data
  • 1 day Apple’s “Holy Grail Of Data” Leaves Energy Traders Disappointed
  • 1 day Gold Rally Adds $250 Billion To Top 50 Miners' Market Cap
  • 2 days TikTok Is Becoming A New Battleground For Tech Politics
  • 2 days Peru's Mining Industry Pummeled As Coronavirus Cases Surge
  • 2 days Why The World Is So Divided In Its COVID-19 Response
  • 3 days Equities Cheer Stellar Jobs Report, But It May Be Fleeting
  • 4 days Is Tech Billionaire Peter Thiel Done With Trump?
  • 4 days Musk Takes To Twitter To Troll The SEC
  • 5 days Lunar Mining May Commence As Early As 2025
  • 6 days Immigration Will Go Bust Without $1.2B Bailout
  • 6 days The Economics Of The Space Race
  • 7 days Why The World's Central Banks Aren't Yet Sold On Renewables
  • 8 days How Much More Cash Can Uber Burn?
  • 8 days Inside The Biggest Counterfeit Gold Scandal In Recent History
  • 8 days EU-U.S. Trade Relations Are Deteriorating
  • 9 days Over 184 Companies Have Bailed On Facebook
  • 9 days BP Sells Petrochemical Business For $5 Billion
  • 9 days U.S. Moves To Secure Domestic Rare Earth Supply
$32 Million Crypto Heist Halts Tokyo Exchange

$32 Million Crypto Heist Halts Tokyo Exchange

Tokyo’s Bitpoint Japan Exchange has…

$15,000 For Your Crypto’s Ticket To Visibility

$15,000 For Your Crypto’s Ticket To Visibility

Market manipulation might be the…

U.S. Pushes For Digital Currency For Immediate Stimulus

U.S. Pushes For Digital Currency For Immediate Stimulus

The world’s governments are rushing…

  1. Home
  2. Cryptocurrencies
  3. Other

JP Morgan Launches A Cryptocurrency

JP Morgan Cryptocurrency

It seems like just yesterday that JP Morgan CEO Jamie Dimon bashed bitcoin as "a fraud" and warned it "won't end well" for investors (though he failed to mention that the bank had been buying bitcoin-linked ETNs traded on a Scandinavian exchange). But in a sign that banks are still seriously exploring applications for blockchain technology despite the blowup in the prices of crypto tokens, JPM announced that it would be rolling out the first cryptocurrency launched by a US bank, according to CNBC.

After banning the purchase of cryptocurrencies by its credit card customers last year, JPM said it will soon begin testing a stablecoin technology in its wholesale payments business now that its engineers have produced a finished product.

The bank said "JPM Coin" will be used to offer instantaneous settlement for transactions in the bank's large corporate clients in its $6 trillion-a-day payments business for large corporations and institutions. Unlike bitcoin, JPM Coin's value won't be subject to the whims of a secondary market; instead, 'JPM Coin' will join the ranks of so-called "stable coins" where its value will be pegged to the dollar.

But it also could have other uses, including facilitating securities transactions and enabling JPM's corporate clients to consolidate their dollar deposits held by subsidiaries across the world.

There are three early applications for the JPM Coin, according to Farooq.

The first is for international payments for large corporate clients, which now typically happens using wire transfers between financial institutions on decades-old networks like Swift. Instead of sometimes taking more than a day to settle because institutions have cut-off times for transactions and countries operate on different systems, the payments will settle in real time, and at any time of day, he said.

The second is for securities transactions. In April, J.P. Morgan tested a debt issuance on the blockchain, creating a virtual simulation of a $150 million certificate of deposit for a Canadian bank.

Rather than relying on wires to buy the issuance — resulting in a time gap between settling the transaction and being paid for it — institutional investors can use the J.P. Morgan token, resulting in instant settlements.

The final use for JPM Coin would be for huge corporations who use J.P Morgan's treasury services business to replace the dollars they hold in subsidiaries across the world, Farooq said. Unseen by retail customers, the business handles a significant chunk of the world's regulated money flows for companies from Honeywell International to Facebook, moving dollars for activities like employee and supplier payments. It generated $9 billion in revenue last year for the bank. Related: The Geopolitics Of Cheap Tabloids

"Money sloshes back and forth all over the world in a large enterprise," he said. "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."And the bank isn't ruling out using the technology to facilitate smartphone payments for its retail customers. But focusing on the corporate application, since JPM counts such a large share of the Fortune 500 as clients, the bank hopes its "first mover" status will give the technology a good chance of being adopted, even if other banks create their own coins.

"Pretty much every big corporation is our client, and most of the major banks in the world are, too," Farooq said. "Even if this was limited to JPM clients at the institutional level, it shouldn't hold us back."Because of its payments focus, some compared JPM Coin to XRP; but as one twitter user pointed out, the coin will most immediately compete with 'settlement coin', a consortium between seven global banks that have been working to roll out something very similar.

Back to homepage

Leave a comment

Leave a comment