JP Morgan becomes the first United States bank to launch a cryptocurrency. The cryptocurrency, JPM coin is a stablecoin that will be trialled in months for the clients and wholesale business.
The Launch Of JPM Coin
As revealed through a press release by the bank on Thursday the financial institution has launched its digital currency, JPM coin. The currency will be utilised to settle international payments of the institution any time of the day within seconds as noted by Umar Farooq, head of J.P. Morgan’s blockchain projects. This will be a tiny fraction of the bank’s $6 trillion in daily transactions. The stablecoin was also further noted as a tool for securities transactions and corporation using the treasury service of the bank.
Also, each of the JPM coins is noted to be redeemable for a single US dollar. The clients of the bank will be issued the coin after depositing dollars at the bank; after using the token for a payment or security purchase on the blockchain, the bank will destroy the coins and give the clients back a commensurate number of dollars.
JP Morgan’s Surprising Venture Into Crypto Space
The news of the launch of digital currency by the financial institution is surprising to most crypto enthusiasts and financial institutions alike. The bank’s representative Brian Marchiony denied the rumour of launching a digital currency by the financial institution earlier in January.
Also, CEO Jamie Dimon had cast aspersion on Bitcoin in the past. He called it a fraud and the institution also banned its purchase by its credit card users. However, the recent move by the financial institution suggests a reverse from the earlier stance of the bank towards cryptocurrency.
The stablecoin’s trial is expected to start in the next few months, when the coin will go live, to become one of the first real use applications in the banking sector for the cryptocurrency. It will be issued on quorum and later extended to other platforms.
Financial Institution Venture In Crypto Space
In recent time, the international monetary fund stated that financial institutions should adopt the qualitative features of the crypto space to enhance their services.
The step taken by JP Morgan could be a step that will be emulated by many financial institutions in months. This could stimulate institutional adoption and funding of the crypto industry.
Meanwhile, the adoption of such crypto by financial institution could affect the use of Ripple and related coins that offers a real-time settlement.