JPMorgan Launches JPM Coin, World’s First Bank to Launch Cryptocurrency15.02.2018
Cryptocurrencies in parallel with the blockchain technology are beginning to gradually enter the banking sector. Today it became known that the large American investment bank JPMorgan in the next few months will begin testing its own digital currency - JPM Coin.
JPMorgan makes daily transfers of more than 6 trillion dollars worldwide. It is expected that a small part of settlements between customers of the bank’s payment unit will be carried out using JPM Coin.
The investment bank is gradually creating a foundation for transition to the future, where all cross-border payments will be carried out using blockchain technology. However, for such a future to come, banks must create an appropriate infrastructure that will allow making payments with lightning speed. In such a reality, there will be no room for old technologies, such as electronic money.
In a conversation with the CNBC channel, the head of the blockchain development department at JPMorgan Umar Farooq (Umar Farooq) identified 3 main areas of application of bank tokens: international payments with the ability to instantly make payments that are made between large corporate clients; operations with securities, which will minimize the time lag between the settlement of the transaction and its payment; and the replacement of dollars that are at the disposal of the divisions of corporations that use the services of JPMorgan stores.
“Large enterprises are constantly engaged in money transfer. Is there a method by which the unit will be able to prove the availability of an appropriate amount of money on its balance sheet without the need for their transfer? In this case, there is an opportunity to collect more money together and probably get better conditions”, said Farouk.
JPM Coin is a stablecoin provided by the US dollar. Clients will receive this token immediately after the payment of fiat money to the bank. Once all the calculations have been completed successfully, JPMorgan will burn JPM Coin and return the corresponding amount of fiat dollars to the deposit to the owner. According to preliminary data, access to the token can be obtained only by tested large institutional clients, for example, corporations, banks and brokers-dealers.
Faruk also admits that it is likely that in future the bank will be used to perform settlements between devices connected to the Internet: “But we can talk about this after the application of the blockchain technology is finally tested, and we will be sure that this direction is promising”.
Recall that the head of JPMorgan Jamie Dimon (Jamie Dimon) has relatively recently been one of the most ardent opponents of Bitcoin and cryptocurrency. However, he subsequently stated that he regretted the past negative comments about Bitcoin.
Today JPMorgan is not only one of the main supporters of cryptocurrency technologies, but is actively involved in the development of this area. A week ago, JPMorgan analyst Nikolao Panigirtzoglu (Nikolaos Panigirtzoglou) said that the cryptocurrency market had gone through a “bubble” phase and looked quite reliable.