JPM Coin, more stable than stablecoins, JPMorgan Chase ventures into the Euro market in addition to the U.S. dollar

JPMorgan Chase & Co. has expanded its significant initiative to bring blockchain technology into traditional banking with the introduction of a "deposit token" called JPM Coin issued by the bank. In addition to being denominated in US dollars, it can also be used for Euro-based corporate client payments, with Siemens of Germany being the first client.

JPM Coin Issued by JPMorgan

JPMorgan launched its own Onyx blockchain network in 2020, making it one of the early traditional financial institutions to embrace blockchain technology. They have issued their own stablecoin, JPM Coin, pegged 1:1 to the U.S. dollar, allowing customers to convert their U.S. dollars held at JPMorgan into JPM Coin. This enables funds to move through the Onyx system for verification, facilitating instant payments and record-keeping, resolving the time-consuming processes inherent in traditional finance.

According to a report from Bloomberg, JPMorgan began Euro transactions last week. Basak Toprak, Head of Coin Systems at JPMorgan for Europe, the Middle East, and Africa, stated that Siemens AG in Germany was the first participant on the platform to make a Euro payment, which was a cross-border transaction.

Despite large banks spending nearly a decade exploring blockchain to enhance their processes, there have been few large-scale commercial operations. JPM Coin stands as a rare example of a large bank actually applying blockchain, albeit representing only a small portion of JPMorgan's payment business. Since its launch, the bank has processed around $300 billion in transactions using JPM Coin. In contrast, JPMorgan processes nearly $10 trillion in payments daily.

JPM Coin, more stable than stablecoins: Bullish for traditional finance, JPMorgan optimistic about banks issuing "deposit tokens"

JPMorgan's In-house Developed Onyx Blockchain

Onyx allows wholesale payment clients such as large multinational corporations to transfer U.S. dollars or Euros between JPMorgan accounts globally or make payments to other clients of the bank using blockchain, rather than traditional payment channels. Unlike traditional transactions processed only during working hours, JPM Coin payments operate continuously and execute faster.

According to Toprak, corporate treasurers can use the system to manage liquidity more efficiently, and the shortened transaction time means companies can earn more interest income on deposits.

In addition to fiat currency transactions in U.S. dollars, Euros, etc., JPMorgan's in-house developed Onyx blockchain offers more tokenization services for various assets. International heavyweight banks like DBS Bank, Goldman Sachs, and BNP Paribas have already used JPMorgan's Onyx blockchain for transactions, utilizing asset tokenization to achieve digital asset processing, recording, and delivery versus payment (DVP) exchanges across asset classes, such as repo agreements and short-term loan transactions commonly used by traditional financial institutions.

For more details about Onyx, please see: JPMorgan's Onyx Blockchain, Realizing Killer Applications in Traditional Finance