Chase Announces JPM Coin Digital Token
One of the goals of cryptocurrencies is to achieve decentralization and free consumers from relying on banks. Yet, this week, one of the top banks in the U.S. revealed that it’s backing its own digital currency — JP Morgan Chase has announced the creation of JPM Coin. As CNBC reports, the coin was created to enable instant transaction settlements between clients.
According to the network, trials of JPM Coin are set to begin in the next few months. At that time only a small number of the $6 trillion in wholesale payment transactions the bank processes daily will utilize the new coin. Similar to stablecoins, JPM Coin will hold a value of $1 USD. CNBC also notes how the issuance of these coins will work, noting, “Clients will be issued the coins after depositing dollars at the bank; after using the tokens for a payment or security purchase on the blockchain, the bank destroys the coins and gives clients back a commensurate number of dollars.”
News of Chase’s plans may surprise some as CEO Jamie Dimon has been an outspoken Bitcoin skeptic. Additionally Chase is among several banks that have cracked down on customers purchasing cryptocurrencies with their credit cards. But, to be fair, Dimon has maintained the position that blockchain technology did present promise. Chase has also embraced FinTech overall in recent years and even plans to build a new campus dedicated to exploring financial technologies.
Interestingly Chase wasn’t the only major bank to make crypto news this week. At the same time that Wells Fargo was experiencing a major service outage, the price of Bitcoin surged from $3,359 to around $3,600. Forbes notes that the bank’s failures highlighted the advantages of digital currencies. Meanwhile some were also gobsmacked that such blackouts were still a problem, with David Thomas of GlobalBlock explaining, “All manners of sardonic posts have been seen on social media channels following the event with many finding it hard to believe that in this day and age the infrastructure could be quite so antiquated and vulnerable to a melt-down.”
Surely it will be some time before we see JPM Coin used at any real scale but just its existence feels like a big deal for blockchain. At the same time you can almost hear the sound of crypto enthusiasts scoffing at this major bank-backed asset being called a “cryptocurrency.” Nevertheless there will certainly be a lot of eyes on Chase and JPM Coin as it launches — and perhaps a line of other institutions willing to test out blockchain once it does.