JPMorgan Chase, one of the largest banking institutions in the United States, has developed its own stablebcoin called JPM Coin, the first US bank-backed cryptocurrency to instantly settle payments between clients.
The trials of JPM Coin will be part of JPMorgan’s corporate payments initiative — the bank moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business.It is assumed that only large institutional clients will take part in the JPM Coin test trials. When the international payments are tested, it will be one of the first real-world applications for a cryptocurrency in banking.
Every JPM Coin will be backed by a dollar. Customers will receive tokens after crediting the money to the bank, and upon completion of all necessary payments the coins will be eliminated and the amount will be returned to the deposit holders in US dollars.
Umar Farooq, head of J.P. Morgan’s blockchain projects noted that the bank sees widespread use of the blockchain technology in the future, but before that happens, it needs a method that would provide remittances with the same speed as smart contracts work.
The banking industry has mostly shunned the crypto assets as too risky. Last year, J.P. Morgan and two other lenders banned the purchase of bitcoins by credit card customers.