JPMorgan officially launches institutional deposit token 'JPM'… public blockchain payments ramp up

Global large bank JPMorgan Chase & Co. has officially launched the deposit-backed token 'JPM Coin' for institutional clients, expanding into the digital asset market. With this launch, clients can perform real-time transfers on a public blockchain using JPM Coin, which tokenizes JPMorgan's deposits.

On the 12th (local time), Bloomberg reported that JPM Coin is a tokenized form of U.S. dollar deposits and can currently be sent and received via the public blockchain 'Base', linked with Coinbase. Naveen Mallela, co-head of JPMorgan's blockchain division, explained, "Payment processes that previously took days can now be completed in seconds, 24 hours a day, 365 days a year."

JPM Coin underwent pilot operations over the past few months with Mastercard, Coinbase, B2C2, and others, and will be opened to clients' clients (secondary institutions) and expanded to other currency-based tokens such as the euro subject to regulatory approval. JPMorgan has already registered the trademark for a euro deposit token called 'JPME'.

This launch signifies that JPMorgan's blockchain strategy has entered a practical commercialization stage. Major global financial firms such as Citigroup, Banco Santander, Deutsche Bank, and PayPal are conducting digital asset payment experiments one after another, and following the passage of the U.S. stablecoin regulatory bill 'GENIUS Act', the use of tokenized assets in traditional finance is rapidly spreading.

Deposit tokens are digital coins issued by commercial banks based on existing deposits, implementing claims on customer deposits on the blockchain. Unlike stablecoins backed by government bonds or other collateral, they are differentiated by tokenizing and directly moving actual deposit assets in bank accounts.

Mallela said, "Stablecoins attracted public attention, but deposit-backed products may be more attractive to institutional clients," adding, "These tokens can be structured to generate yield." In practice, JPMorgan plans to allow JPM Coin to be used for inter-institutional collateral settlement on Coinbase as well.

Banks such as BNY Mellon and HSBC have also introduced or are considering deposit token services. JPMorgan already processes an average of $3 billion per day in dollars, euros, and pounds through its payment network 'Kinexys Digital Payments'. While this is small compared to the traditional payments unit's daily processing of about $10 trillion, it is seen as indicating the commercialization potential of the tokenized payments market.