JP Morgan Launches JPM Coin

The US banking major, JP Morgan Chase & Co. (JPM) is launching the world’s first American bank-backed cryptocurrency in a bid to transform the global payments sector.

The Future of Blockchain Tech at JPM

JP Morgan, one of the biggest banks in the world, moves about $6 trillion globally on a daily basis as a part of its mammoth wholesale payments business. Now, in trials that the company will conduct over the next few months, a fraction of that amount with be moved around using its newly developed cryptocurrency, the JPM Coin.

The lender is preparing for a future where financial transactions ranging from corporate debt insurance to cross-border payments will take place on the Blockchain.

However, to make that future a reality, the bank needed to create a way in which money could be moved almost in an instant. The head of JPM’s Blockchain technology division, Umar Farooq stated that the applications of Blockchain technology at the bank were endless. He said that anywhere that distributed ledger was involved in institutions or corporates, this technology could be used.

Building the Foundations

JPM Coin will initially be used for international payments for major corporations across the globe. This would help reduce transaction times from the current 1 or more business days using current payments systems such as SWIFT, to just a few minutes or seconds.

Farooq also stated that if the initial trials in cross-border payments were successful, then the use of the technology could be expanded to securities transactions as well as treasury services. However, at this point, they would only use a small fraction of the monies that the bank dealt with.

Despite that, Farooq said, even if they limited the transaction trials to just direct JP Morgan’s institutional clients, it would not hold them back. Each JPM Coin will be equal in value to $1, just like stablecoins, so that there is minimal fluctuation in its value.

Once the trials are completed, JPM Coin will become one of the first cryptocurrencies to have a real-world application in the banking world.

An About-Face

For many, the new cryptocurrency created by JP Morgan comes as an unexpected step, especially considering that this technology came about as a result of the financial crisis, and whose aim was to disrupt the traditional banking sector.

Last year, JP Morgan, along with two other major banks, banned the buying of Bitcoins and other cryptocurrencies using credit cards. Added to that, the Chief Executive Officer of the company, Jamie Dimon publicly called Bitcoin and other cryptos a fraud and not worth investing in.