It will consist of "JPM Coin" handling a tiny percentage of the daily transaction volume by the bank.
While the cryptocurrency craze may have died down a bit, J.P. Morgan Chase is betting big on the digital asset by creating the first cryptocurrency by a major U.S. bank, CNBC reports.
JPMorgan's JPM Coin is essentially an in-house digital payment system for transactions that utilize blockchain.
In short, a JPM Coin will have a fixed value redeemable for one USA dollar. JPM Coin will be issued on Quorum and "subsequently extended to other platforms" and "operable on all standard Blockchain networks".
Furthermore, all clients who use JPM Coin will be required to undergo a KYC and AML process to ensure regulatory compliance.
In the future though, JP Morgan envisions a network where clients, such as large banks, can move coins between themselves on the network without the bank being able to see the transactions. This will allow such corporate clients to settle payments across borders in real time.
With the introduction of JPM Coin, there are many possible outcomes pertaining to the effect on crypto as payment.
JPM Coin, the first digital currency backed by a major USA bank, runs on blockchain technology and has already successfully been used to move funds between the bank and a client's account.
Replacement for dollars held in treasuries - The token could replace dollars held by subsidiaries of huge corporations across the world.
According to Farooq, JPM Coin is now a prototype that will be tested with a small number of institutional clients, with plans to expand the pilot program later this year. However, if the tests succeed, retail investors may also tap into it over time.
This is a major breakthrough in the future of cryptocurrency, which has so far been mostly shunned by the global banking industry who saw it as a risk not worth taking, while its price rate plummeted throughout a year ago.
JPMorgan Chase, the largest US bank (and the world's sixth largest), has created its own cryptocurrency, a stablecoin called "JPM Coin". Later Dimon confessed he regretted this criticism.
Blockchain is real, it's technology, but bitcoin is not the same as a fiat currency.
The launch of JPMorgan's own coin marks another dramatic change in the institution's stance on digital currencies and provides the bank with an essential advantage as the pioneers in this area.
While JP Morgan has laid out what it hopes to do with JPM Coin, it has been less transparent about the technical details of the token. It was also during that appearance that said that he would terminate any trader that he found to be trading Bitcoin for being "stupid". Over time, the bank promised to extend the capabilities to other currencies globally.
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