JP Morgan has announced its issuance of the JPMD token, positioning the bank as the first in the US to put digital money onto public blockchain.
Following the company’s filing for a JPMD ticker trademark, JP Morgan has officially announced its plans to launch the JPMD token.
On the base network, the JPMD token will represent dollar deposits in the world’s biggest bank, signalling another sign of convergence between crypto and fiat.
Currently, the token remains in early pilot stages, restricted only to the authorised clients of the bank.
For early testing, the token is to be launched on Coinbase, with the first transaction expected to happen in the next coming days.
The asset is denominated in US dollars and represents bank deposits for the use of Coinbase’s institutional clients.
Last week the US senate passed the GENIUS Act, requiring all stablecoins to be fully backed by US dollars or comparably liquid assets.
However, despite the recent surge in stablecoin issuances, such as Deutsche Bank’s planned AllUnity stablecoin and Société Générale’s EUR CoinVertible, JP Morgan has chosen a deposit token.
“From an institutional standpoint, deposit tokens are a superior alternative to stablecoins,” said Naveen Mallela, global co-head of JP Morgan’s Kinexys, the firm’s blockchain-based financial infrastructure.
“Because they are based on fractional banking, we think it is more scalable.”
Manella explained that deposit tokens have long term interest-bearing advantages, and are covered by deposit insurance, contrastingly to major stablecoins today that do not.
