Key Highlights
- •The token is backed by dollar deposits and enables instant, round-the-clock fund transfers.
- •Transactions will run on Base, Coinbase’s public blockchain, allowing faster and continuous settlements.
- •The pilot involves firms like Mastercard, Coinbase, and B2C2, with plans to expand to more users and currencies after regulatory approval.
JPMorgan Chase & Co. has begun introducing a blockchain-based deposit token, known as JPM Coin (JPMD), for its institutional clients, marking a new step in the bank’s use of distributed ledger technology.
The token is backed by dollar deposits held at JPMorgan. It allows users to transfer funds instantly, unlike traditional payment systems that operate only during business hours.
Naveen Mallela, Global Co-Head of the bank’s blockchain division, Kinexys, revealed that transactions will run on Base, a public blockchain affiliated with Coinbase Global Inc. The system is designed to enable faster settlement and continuous transfer of funds without relying on conventional clearing timelines.
Pilot Program and Expansion Plans
JPMorgan first announced plans for JPMD, the ticker for JPM Coin, in June, outlining an early pilot of blockchain-based tokens that represent bank deposits. A euro version of the deposit token, under the trademark JPME, has already been registered.
The coin is currently being tested with institutional partners, including Mastercard, Coinbase, and B2C2. The bank plans to expand access gradually, starting with clients of its institutional customers and later adding other currencies after regulatory approvals.
Mallela stated that deposit tokens may provide a more familiar and regulated framework for institutional clients that need blockchain-based payment options.
Deposit Tokens in Banking
Deposit tokens are digital versions of bank deposits that can move on blockchain networks. They are different from stablecoins, which private companies issue and back with assets like cash or bonds. Unlike stablecoins, deposit tokens can also earn interest from the bank deposits they represent.
Other global banks, including BNY Mellon and HSBC, are also exploring and testing deposit token models. JPMorgan’s blockchain network, Kinexys Digital Payments, already processes more than $3 billion in transactions each day, compared with the roughly $10 trillion handled daily through its conventional payment systems.
The rollout expands JPMorgan’s work in blockchain technology at a time when major banks and corporations, including Citigroup, Banco Santander, Deutsche Bank, and PayPal, are testing digital asset systems aimed at improving payment speed and reducing costs.
Regulation Shapes the Landscape
JPMorgan’s move to roll out JPM Coin comes at a time when the U.S. is tightening its rules around digital money. In July, President Donald Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which provides a clear framework for stablecoins and other blockchain-based payment tokens.
Under the new law, issuers must meet stricter standards for holding reserves, being transparent about their assets, and gaining approval to operate. For established banks like JPMorgan, which already follow tough regulatory rules, this creates a clearer path to launch blockchain-based products within existing laws.
Meanwhile, private stablecoin issuers could face more limitations, which might shift the balance in favor of regulated banks looking to develop their own digital money systems.