BREAKING: JP Morgan Launching First-Ever US Bank-Backed Cryptocurrency

BREAKING JP Morgan Launching First-Ever US Bank-Backed Cryptocurrency

A breaking story from JP Morgan alleges that the bank is now launching the first US bank-backed cryptocurrency. This marks an important precedent in traditional financial institutions embracing blockchain technology.

The token will be named the JPM Coin

Specifically, this news comes from a recent report on CNBC. According to CNBC, the American banking behemoth – which has a wholesale payments organization which processes approximately $6 trillion per day – will begin trialing the cryptocurrency over the coming months.

Although the amount moved by JP Morgan’s own cryptocurrency will reportedly be minuscule at first, there is nothing stopping these volumes from growing once JP Morgan has worked out all the kinks.

The digital token will supposedly be named the ”JPM Coin” and will – unsurprisingly – be used to settle payments between the New York-based bank’s clients.

All of this comes as the banking industry are increasingly looking towards blockchain technology in order to solve issues pertaining to cross-border payments and corporate debt issuance.

Smart contracts enable banks to transfer and process funds far quicker than wire transfers, and the legacy systems used by banks today. Nevertheless, JP Morgan will be the first bank to move beyond rhetoric and actually launch a bank-backed cryptocurrency in the US.

CNBC also quoted Umar Farooq, who is the head of JP Morgan’s blockchain endeavors. ”So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,” Farooq stated.

”The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”

Although some may be surprised by JP Morgan’s decision to embrace a technology which some view as potentially superseding the traditional banking world, the bank has previously been clear that it recognizes the vast potential of blockchain technology.

Three main use-cases for JPM Coin

Moreover, Farooq pointed out three main applications for the JPM Coin. The first of these is international payments for sizable corporate clients. These are currently done using wire transfers, relying on old processing networks such as SWIFT. Using JPM Coin, these payments will reportedly settle in real time, as well as any time of day.

Secondly, JP Morgan’s token may also be used for securities transactions. JP Morgan has previously tested a debt issuance on the blockchain, and the token will allow institutional investors to buy the issuance. This would eliminate the time gap connected to settling the transaction.

Finally, corporations could also use JP Morgan’s treasury services business in order to take the place of dollar holdings in their subsidiaries all over the world. This could dramatically simplify large corporations’ money flows.

”Money sloshes back and forth all over the world in a large enterprise,” Farooq noted. ”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.”

Furthermore, Farooq was also noted by CNBC as stressing that there are more potential use-cases for JPM Coin in the future. It remains to be seen how this story continues to evolve, as JP Morgan begin trialing the cryptocurrency.

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