Key Insights
- •According to Ethereum news, Base fees are paid in ETH, so every on-chain JPMorgan dollar directly increases demand for Ether.
- •JPMorgan’s $10 trillion/day flows can now use Base via a new deposit token (JPMD/JPM Coin).
- •Massive RWA on-ramp: JPM Coin is fully backed by bank deposits, effectively bringing TradFi dollars on-chain.
JPMorgan Launches JPM Coin on Coinbase's Base Network
J.P. Morgan’s Kinexys division has launched a USD deposit token on Coinbase’s Base network, linking the bank’s substantial payment flows to crypto rails. This new token, JPM Coin (formerly JPMD), represents dollar deposits and settles on Base in near real-time, allowing the bank’s $10 trillion-a-day payments network to move on-chain via Base.
Analysts highlight this as a significant real-world asset (RWA) on-ramp. JPM Coin is backed by actual bank deposits, not crypto reserves, legally bringing traditional cash into the blockchain ecosystem.
Even a small fraction of J.P. Morgan’s on-chain flow, such as 1% (approximately $100 billion), would significantly exceed Ethereum L1’s daily throughput, which currently handles around 1.5 million transactions per day.
Since all Base transactions are paid in ETH, each dollar JPMorgan moves on-chain directly fuels demand for Ethereum’s native asset. This development is anticipated to be a major catalyst for network activity and fee demand on Ethereum.
Details of the JPM Coin Launch
According to a report by Bloomberg, JPMorgan’s blockchain unit Kinexys has successfully launched its dollar-deposit token on the public blockchain Base. The pilot of the JPM Deposit Token (JPMD) on Base was first unveiled in June.
The token is now fully operational under the "JPM Coin" brand and is available to JPMorgan’s institutional clients for 24/7 settlement. The deposit token represents actual USD deposits held at J.P. Morgan, enabling near-instantaneous transfers using Coinbase’s public blockchain, Base.
Unlike typical cryptocurrency stablecoins, JPM Coin is fully backed by bank reserves. JPMorgan is the first bank to issue a US-dollar token on a public chain. The bank states that JPM Coin "delivers the security of bank-backed deposits and settlement, combined with the speed and innovation of 24/7, near real-time blockchain transactions."
Minting JPM Coins requires only a client's bank account because it is backed by regulated deposits, eliminating the need for an off-ramp to a crypto exchange to issue the token. Early trials involved prominent participants such as Mastercard, Coinbase, and crypto market maker B2C2, and the token has been approved as collateral on Coinbase's platform.
Bridging Traditional Finance and Crypto
This launch underscores JPMorgan’s strategic initiative to bridge traditional finance and the cryptocurrency world. The bank's Kinexys network currently processes approximately $3 billion in transactions daily, which represents a small portion of JPMorgan's overall daily payments volume of roughly $10 trillion.
In contrast, Base is an open ETH Layer 2 solution that was already processing millions of transactions daily in 2024. By enabling JPMorgan's dollars to move onto Base, the bank is tapping into enormous "real-world asset" (RWA) volume. This action effectively transforms legacy bank deposits into digital tokens, introducing a substantial new source of capital into the Ethereum ecosystem.
Industry experts consider JPM Coin a significant real-world asset on-ramp, as JPMorgan is merging traditional payment rails with blockchain rails by digitizing bank money. The deposit token functions similarly to an interest-bearing stablecoin backed by reserves, but with the added convenience of blockchain-based transactions. This development is regarded by industry analysts as "one of the biggest steps yet in bridging TradFi money to crypto rails."
For instance, JPMorgan customers can deposit USD at the bank and immediately receive tokenized JPMD on Base. This token can then be sent globally 24/7 without the need for conversion into cryptocurrency first, effectively making dollars behave like native crypto tokens.
Impact on Ethereum Network and Fees
The implications for the Ethereum network are substantial and warrant significant attention. Even a minor portion of JPMorgan’s transaction flows could dramatically increase ETH traffic. For perspective, Ethereum’s base layer currently handles around 1.5 million transactions per day, while JPMorgan’s global payment system processes about $10 trillion daily.
If merely 1% of that volume, approximately $100 billion, were transacted on Base, it would far surpass current Ethereum L1 usage. This volume could potentially triple the network’s daily transaction count, elevating Ethereum’s transaction volume to an institutional scale.
This increased activity would immediately boost demand for Ethereum block space and transaction fees. Crucially, Base is an Ethereum-compatible chain where all transaction fees are paid in ETH. Consequently, every on-chain JPMD transaction effectively converts bank dollars into fees paid in Ether, leading to more ETH being burned or paid to validators.
Over time, this could lead to a significant increase in network fee revenue. In essence, JPMorgan’s on-chain flows are poised to create a powerful economic tailwind for the Ethereum network.