The US banking major J.P.Morgan proudly announced that it has become the first US bank to create and successfully test a digital coin representing a fiat currency.
Christened as JPM Coin, the newbie coin is designed using blockchain-based technology enabling fast transfer of payments between institutional accounts. Exchanging money between different parties over a blockchain requires a digital currency, so this is the sole purpose of JPM Coin.
Clarifying whether JPM Coin is a currency or any other financial instrument, the news conveyed –
“The JPM Coin isn’t money per se. It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A. In short, a JPM Coin always has a value equivalent to one U.S. dollar. When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.”
J.P.Morgan has assured that its JPM coin would cater to other fiat currencies in the coming future. The testing method adopted was transferring money between a client account and J.P.Morgan account using the novel technology.
The banking giant reiterated its view of cryptocurrencies stating that this high technology is truly beneficial until it falls in the purview of regulations and compliance. The bank has a firm belief that JPM Coin can generate significant benefits for blockchain applications by reducing client’s counterparty and settlement risk.
The news intuitively captured how the JPM coin differs from other cryptocurrencies highlighting that the value of the digital coin is an inborn quality and would always be redeemed as one-is-to-one. It also headlined its blockchain as being public – open access.
Citing on the official regulation that JPM would be adhering to, J.P.Morgan clarified that the JPM coin is still only a prototype and as it moves into deployment, it would enter the phase wherein there would be a discussion with regulators. This phase would also cover getting their feedback.
A key piece of information is that JPM coin would be facilitated using Quorum, the bank’s blockchain technology. However, the systems in place would be eventually scaled up for JPM coin to function on all standard blockchain networks.
The news made it very clear that it was too early to evaluate the impact of this technology on other business verticals. There would be discussions with clients in the future and use cases would be delisted to make full use of this new development.
J.P.Morgan concluded in their questionnaire style news that JPM coin is not available for individuals at the moment.