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The world's largest bank, JPMorgan Chase, continues to expand its presence in the cryptocurrency world.
The company announced that it has developed a new stablecoin-like token called “JPMD.” Speaking to CNBC, JPMorgan officials stated that this new token will be launched on Coinbase's public blockchain platform Base, which is built on the Ethereum network.
JPMD, defined as a “deposit token,” will be the digital representation of commercial bank deposits. Developed for institutional clients, this token will offer 24/7 payment and clearing opportunities, while also providing interest income. Naveen Mallela, global co-head of JPMorgan’s blockchain unit Kinexys, said JPMD is expected to be used by institutional clients for on-chain asset exchange and international B2B transactions.
“Having an interest-bearing structure will provide greater interchangeability with existing bank products,” Mallela said.
JPMorgan argues that deposit tokens are more practical for institutional clients than stablecoins, as the new approach allows for faster and more efficient digital transactions while remaining dependent on the traditional banking system.
Stablecoins are digital assets that are typically pegged one-to-one to fiat currencies like the dollar. The most well-known stablecoins on the market include Tether’s USDT and Circle’s USDC. According to CoinGecko data, the global stablecoin market has reached a size of approximately $262 billion.
*This is not investment advice.