JPM Coin on Coinbase Base: A Pilot Program

JPMorgan Chase Pilots JPMD Deposit Token on Coinbase's Base

JPMorgan Chase, a leading US bank, is piloting its JPMD deposit token on Coinbase's Base network. This initiative is exclusively for institutional clients and marks a notable step in the adoption of blockchain technology within the traditional finance sector.

Key Takeaways

• JPMorgan Chase is piloting the JPMD token, representing dollar deposits, on the Base blockchain.
• Access to JPMD is limited to institutional clients.

According to a Bloomberg report, JPMD is designed for use on public blockchains but will initially be restricted to institutional investors. This pilot program represents a significant move by a major financial institution to explore the potential of tokenized deposits.

Naveen Mallela, global co-head of JPMorgan's blockchain division Kinexys (formerly Onyx), highlights JPMD as a superior alternative to stablecoins for institutions. He argues that JPMD offers enhanced scalability and potential future benefits, including interest-bearing features and deposit insurance.

“They are based on fractional banking, we think it is more scalable,” Mallela stated. He also noted the potential for interest and deposit insurance.

Kinexys plays a key role in JPMorgan's digital payment solution, JPM Coin. The rebranding of Onyx to Kinexys and the launch of Kinexys Digital Payments reflect JPMorgan's broader strategy to leverage blockchain technology beyond its initial JPM Coin use case.

The pilot program will involve an initial transaction transferring JPMD tokens from JPMorgan's digital wallet to Coinbase via Base. Base was chosen for its low transaction fees, rapid settlement times, and increasing dApp adoption.

JPMorgan plans to run the pilot for several months before considering expansion to other currencies and client types, subject to regulatory approvals. This pilot represents a groundbreaking step for a major US bank, potentially paving the way for broader adoption of deposit-backed tokens on public blockchains.

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