JPMorgan announces first US bank backed cryptocurrency

By Harry Menear
Multinational investment bank JPMorgan Chase has announced today (14 February)plans to roll out its own cryptocurrency, JPM Coin, to instantly settle pa...

Multinational investment bank JPMorgan Chase has announced today (14 February) plans to roll out its own cryptocurrency, JPM Coin, to instantly settle payments between clients, according to a CNBC report. 

This is the first cryptocurrency to be backed by a US lending house. JP Morgan, which oversees the movement of more than US$6trn each year, will initially use JPM Coin for a ‘tiny fraction’ of its transactions.

This move by the bank represents a dramatic about-face in contrast to its position even a year ago. In 2018, JPMorgan banned the purchase of Bitcoin by its credit card customers, shunning the blockchain technology based cryptocurrency as being ‘too risky’. When the first international payments are made using the coin, it will represent one of the banking industry’s first practical applications for a cryptocurrency.

Speaking to CNBC, JPMorgan's head of blockchain projects Umar Farooq said: "Anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction.The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this."

Primarily, the cryptocurrency will be used to replace decade-old services like Swift when processing international payments between large corporations, as well as securities transactions and to provide treasury services to the world’s largest corporations.

SEE ALSO:

Farooq added: "Money sloshes back and forth all over the world in a large enterprise. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it."

JP Morgan backs 80% of the companies listen on the Fortune 500 list, and believes that this strong market presence, in combination with its first-mover status in the field of blockchain, will result in competitive advantage.

Farooq added: "Pretty much every big corporation is our client, and most of the major banks in the world are, too. Even if this was limited to JPM clients at the institutional level, it shouldn't hold us back."

Share

Featured Articles

Why Web3 payment services will overcome legacy limitations

Mark Smargon, founder and CEO of Fuse, discusses how Web3 will transform the payments space and overcome financial legacy limitations

Interview: We asked a chatbot what it thinks about chatbots

We interviewed ChatGPT, the text-based chatbot taking the internet by storm, about the future of artificial intelligence (AI) in banking and finance

The challenges of address data in cross-border payments

A truly global solution is critical to meeting cross-border needs at scale, writes Loqate, a leading developer of global address verification solutions

Top 10 fintech disruptions to watch out for in 2023

Financial Services (FinServ)

PBF CEO, Morgan McKenney on blockchain, DeFi & tokenization

Crypto

UAE-based BNPL fintech Tabby secures $58mn in Series C round

Digital Payments