JP Morgan Tests Own Digital Currency
Investment bank JP Morgan is testing its own digital currency for use in its wholesale payments business.
The currency is called the JPM Coin and is pegged 1:1 against the US dollar, similar to stablecoins – cryptocurrencies pegged to currency. It is instantly redeemable against the dollar and there are plans to deploy it against other fiat currencies too.
The JPM coin will initially be used for three main purposes.The first is to offer corporate clients a real-time alternative to money transfer systems like Swift and wire transfers. Transfers can take hours or even days, whereas a trusted blockchain-based digital currency could allow the process to be virtually instantaneous.
Another is for securities transactions, reducing the time between settling the transaction and money changing hands. Again, wire transfers can introduce a significant delay.
The third use-case is to allow corporations that use J.P Morgan's treasury services to replace the dollars they hold in subsidiaries across the world with JPM Coin.
However, there are many more potential use cases for the JPM coin, according to Umar Farooq, who heads up the bank’s blockchain development.
"So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction," Farooq said on the bank's website.