J.P. Morgan Launches JPM Coin on Public Blockchain, Bringing 24/7 Bank-Backed Settlements to Institutions

Investment banking giant J.P. Morgan has begun deploying JPM Coin (JPMD), a blockchain-based deposit token for institutional clients.

Naveen Mallela, Co-Head of Kinexys, said the token represents US dollar deposits at J.P. Morgan and can be sent and received on Base, the Coinbase-built layer-2 endorsed by the bank.

JPM Coin delivers the security of bank-backed deposits and settlement, combined with the speed and innovation of 24/7, near real-time blockchain transactions, increasing efficiency and unlocking liquidity.

Naveen Mallela, Co-Head of Kinexys by JP Morgan

Kinexys (formerly Onyx) is J.P. Morgan’s blockchain unit, which processes about US$2 billion (AU$3.06 billion) in daily crypto transactions, and over US$1.5 trillion (AU$2.28 trillion) in notional value since inception (in 2020).

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JPM Coin Goes Live

One of the main characteristics that differentiates JPM Coin from stablecoins is that the former represents funds already in customer deposit accounts at the bank, whereas the latter are backed by external reserves (cash, note deposits, etc).

Its underlying mechanics are fairly straightforward: clients deposit dollars, receive equivalent JPMD on-chain, transfer tokens peer-to-peer to other approved J.P. Morgan clients with near-real-time settlement, and redeem back to USD in their bank accounts.

Another key characteristic is that JPM Coin is interest-bearing for institutional users, granting yield to tokenised deposits. This feature, if broadly applied, would differentiate it from most non-bank stablecoins that do not accrue interest to holders. Independent verification of the interest-bearing terms is not available here.

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This comes just a few weeks after the bank announced it would allow its institutional clients to use Bitcoin (BTC) and Ethereum (ETH) as collateral for loans, as Crypto News Australia reported.

Running on Base provides 24/7 availability, faster confirmation than traditional banking windows, and access to smart-contract tooling for programmable payments and automated workflows. The blockchain has suffered a few outages in the past, though nothing out of the blue, as each one only lasted for about 30 minutes.