JPMorgan’s stablecoin to go retail as volumes surpass $1B

abdelaziz Fathi

JPMorgan Chase & Co.’s proprietary digital token, JPM Coin, is reportedly handling transactions worth $1 billion each day, signaling the growing acceptance and usage of the bank’s stablecoin. The news was confirmed by Takis Georgakopoulos, JPMorgan’s Global Head of Payments, during an interview on Bloomberg Television.

JPMorgan Chase

Launched in 2020, the JPM Coin was initially designed as a temporary means for real-time gross settlement among JPMorgan’s institutional clientele. The digital token is a stablecoin pegged directly to the US dollar, with a 1:1 collateralization ratio. Its primary purpose was to address fundamental inefficiencies that plague the existing payment infrastructure.

Georgakopoulos highlighted three key issues in the current payment systems: the speed of payments, particularly in cross-border transactions; the separation of money and information, which complicates transaction tracking and reconciliation; and the fungibility of money. JPMorgan aims to address these issues through JPM Coin.

While the majority of JPM Coin transactions currently occur in US dollars, JPMorgan has plans to extend its utility. The next step, according to Georgakopoulos, involves creating a retail version of the digital asset. This could be achieved through central bank digital currency (CBDC) or by enabling banks to develop digitalized versions of deposits using blockchain technology.

Earlier in June, the Wall Street lender expanded the usage of its blockchain-based settlement token to include euro-denominated payments. The first transaction on the platform was conducted by German tech conglomerate Siemens AG.

The trial took place on JP Morgan’s permissioned blockchain, a distributed ledger that is not open to the public and requires authorization for access. The platform enables the lender’s institutional clients to conduct wholesale payments across global accounts using blockchain technology as the underlying infrastructure.

JPM Coin serves as a payment rail and deposit account ledger, enabling participating entities to transfer fiat money held in deposit with the largest bank in the United States. Since its launch in 2019, the token has facilitated over $400 billion in transactions, establishing itself as one of the most prominent applications of blockchain technology by a traditional financial institution. That compares to JPMorgan’s daily transaction volume of nearly $10 trillion through conventional means.

The New York-based lender started trials of its JPM Coin in conjunction with corporate clients with the ultimate aim of speeding up transactions, such as cross-border payments and corporate debt issuance.

The Central Bank of Bahrain also completed a successful overseas remittance trial enabled by JP Morgan’s digital currency. Bahrain’s Bank ABC initiated real-time payments for Aluminium Bahrain (Alba) with its counterparties in the US using the JPM Coin system.

JPMorgan, which its CEO, Jamie Dimon once bashed cryptocurrencies as a fraud that will not end well for its investors, created a new unit to handle its blockchain business called Onyx.

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