After going hard on cryptocurrencies with its CEO even threatening to fire any employee who dealt with Bitcoin, JPMorgan is set to launch JPM Coin, the banks own cryptocurrency making it the first bank to launch a cryptocurrency.
The coin is set to be used to settle real-time transactions between clients of its wholesale payments business. This will be huge as the bank is said to move about $6 trillion daily according to CNBC.
The token will replace wire transfers for international payments by large clirnts but also make the speed of transactions smoother and faster according to JPMorgan’s lead blockchain developer, Umar Farooq.
Other use cases are said to be settlement of securities issuance and replacement of the US dollar held internationally by subsidiaries of major cooperations using JPMorgan’s treasury service.
JPM coin will function similarly to other stable coins as fiat currency needs to be deposited to a bank account in exchange for the token via a distributed ledger.
It should be noted that it’s CEO not only threatened to fire employees dealing with cryptocurrencies but also referred to them as “Fraud” before later accepting last year that cryptocurrencies posed a threat to their business.
In its announcement of JPM Coin, the bank stated ;
“We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated… As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators”
JPM coin is said to have been under development since last year and was created in response to client demands though no specific clients have been named yet by the bank.
The difference between JPM coin and traditional cryptocurrencies is that while traditional cryptocurrencies use public, open source blockchains, JPM coin runs on a private blockchain and has a value pegged to the dollar.