United States banking giant JPMorgan Chase (JPM) is launching its own digital coin that will instantly settle payments between clients. According to a February 14 report from CNBC, this will be the first cryptocurrency created by a major US bank.
JPMorgan is preparing for a future in which everything from cross-border payments to corporate debt issuance moves to blockchain, CNBC reported, as technology such as wire transfers are slowly becoming outdated.
“The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this,” Umar Farooq, head of JPMorgan’s blockchain projects, said.
Each JPM Coin is redeemable for a single U.S. dollar, so its value shouldn’t fluctuate, executives from the company explained. After depositing US dollar at the bank, clients will be issued the coins to be used for payments or security purchased on the blockchain. Once the transaction is complete, the bank will destroy the coins and give its clients back a commensurate number of dollars.
Farooq said that there are currently three early applications for the JPM Coin. The first is for international payments for large corporate clients, the second for securities transactions, while the third use would be for huge corporations that use JPMorgan’s treasury services business to replace the dollars they hold in subsidiaries across the world.