JP Morgan created its own cryptocurrency
The biggest U.S. bank, and the fifth major bank worldwide, JP Morgan Chase has officially become the first major U.S. institutional crypto player that has launched its own cryptocurrency, JPM Coin. The project is currently in its very first, early stage, however, the bank officials already outlined the bank’s roadmap for its crypto uses. According to Umar Farooq, head of J.P. Morgan’s blockchain projects, there are three current applications of JPM Coin.
The first is international payments for large corporate clients, which are currently being done through “century-old” systems, like Swift. Because of its inefficiency, and all the differences between payment systems in different countries, sometimes these transfers can take up to a full day.
The second use case of JPM Coin is securities transactions. In April of last year, JP Morgan tested a debt issuance on the blockchain, creating a simulation of a $150 million certificate of deposit for a Canadian bank. The use of the JP Morgan token here also helps to avoid longer settlement times and eliminate the time gap between settling the transaction and being paid for it.
The third use of a JPM Coin is in the treasury service business that the bank uses for large corporations for employee and supplier payments across the world. This service alone has generated $9 billion in revenue for JP Morgan last year. According to Farooq, their digital token will help with creating a way “to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit,” which will also ultimately lower the rates.
Additionally, Farooq mentioned that the bank is currently reviewing other avenues for JPM Coin use, including “payments on internet-connected devices.”
With the biggest U.S. bank putting their skin into the crypto game and creating its own stake in it, how soon are other banks to follow?