JPMorgan is working on its own cryptocurrency

JPMorgan is working on a new, proprietary cryptocurrency. The largest US bank has already gained experience with blockchain technology in recent years. She estimates that digital settlement tokens will be a resounding success among banks.

Why JPMorgan is working on its own cryptocurrency

The US bank JPMorgan Chase & Co is working on a new cryptocurrency of its own, as Bloomberg recently reported . The aim of the digital token should be to process payments.

Thanks to the token, the process should be more successful than before. Cross-border payment transactions in particular are slow and expensive without such a solution. The bank itself has not yet commented publicly on the new system. Bloomberg relies on previously unpublished knowledge from internal informants. The new structure is almost finished.

“The largest U.S. bank by assets has already developed most of the infrastructure required for the new form of payments,” explains Bloomberg.

However, it is not yet clear whether the token can be published. To do this, the bank first needs approval from US regulatory authorities. Nevertheless, after government legitimation, it would still be a few months before JPMorgan makes the token available to its customers. This is not about private customers, but about commercial partners.

“Deposit tokens bring many potential benefits, but we also understand that regulators want to exercise care and diligence before developing and deploying a new product,” a bank spokesperson explained.

Thanks to newly developed systems, JPMorgan customers will apparently have the opportunity to publish their own tokens.

Should this appetite develop, our blockchain infrastructure would be able to support the adoption of deposit tokens relatively quickly.

What happened to JPM Coin?

The new product, whose name is still unknown, is not JPMorgan’s first touchpoint with digital tokens. In 2019, the US bank introduced the JPM Coin. This is also a specially issued token.

The JPM Coin enables bank users to move euros and US dollars quickly and easily within the bank’s systems. It is also based on a blockchain and is only accessible with permission from the bank. From 2019 to June 2023, 300 billion US dollars were processed in this way.

However, the JPM Coin is not intended for payments between several users who are customers at different banks. The new development is intended to fill this gap.

The nameless token will initially reflect the value of the US dollar. Further on, there is also the option of creating different variants, which then reflect other fiat currencies.

According to the informants, JPMorgan does not intend to have functions other than payment processing. The aim is neither to compete with other cryptocurrencies nor with stablecoins.

The concept is likely to compete with the RippleNet from the crypto company Ripple. The way both systems work sounds very similar. In addition to the billing system for banks, Ripple also offers its customers the option to create their own tokens.

“We believe that deposit tokens will become a widespread form of money within the digital asset ecosystem, just as commercial bank money in the form of bank deposits now accounts for over 90 percent of money in circulation,” explains JPMorgan in a study .