JP Morgan has announced the first US bank-backed cryptocurrency called “JPM Coin” which will be used to instantly settle transactions between clients of its wholesale payments business. The amount will be small as only a fraction of the overall business will use the coin in a trial that will mark the first real-world use of a digital coin by a major US bank. Many of the management team, disagreeing with their boss Mr Jamie Dimon, say that the blockchain and regulated digital currencies held promise.
The lender moves about $6 trillion around the world every day for corporations in its global payments business. The trials will handle only a fraction of the overall business, a very small fraction, but the promise is there. This new system that can instantly settle payments with blockchain technology, and can settle cross-border payments to corporate debt issuance, all can be, in theory move to blockchain.
This technology comes from a bank that saw its head, Mr Jamie Dimon bash it as a fraud, saying it won`t end well for its investors. But with this new JPM Coin, the digital coin is redeemable for a single US dollar so the value should not fluctuate. This is much like the stablecoins. Clients will, in this system be issued the coins after depositing dollars at the bank. But after the coins are used for purchases of securities, the bank destroys the coins and gives the clients back the commensurate number of dollars.