Announced today, J.P. Morgan became the first U.S. bank to create and successfully test a digital coin representing a fiat currency, also known as a stablecoin. It is currently being tested for instantaneous payments between institutional accounts and is not available to consumers.
The coin, JPM Coin, will be issued on J.P. Morgan's Quorum Blockchain and will be operable on permissioned, enterprise grade, secure blockchain solutions built by J.P. Morgan and their partners. Only institutional customers passing J.P. Morgan KYC can transact with these coins. The coin will represent US dollars held in JPMorgan Chase accounts.
This comes in the aftermath of J.P. Morgan CEO Jamie Dimon saying that Bitcoin is a fraud and that he doesn't care about Bitcoin. The bank's official stance on cryptocurrencies reads:
"We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated."
However, this does not mean that the bank has issued a cryptocurrency. According to Kevin McMahon, Executive Director of Emerging Technologies and blockchain/crypto expert at the digital tech consultancy SPR:
"It’s important to note that JPM Coin isn't exactly crypto; rather, it’s a financial instrument that leverages blockchain technologies. Just like Bitcoin, JPM Coin can be thought of as an application written on top of a blockchain platform. There aren’t any inconsistencies between what [CEO] Jamie Dimon has said publicly about Bitcoin and JP Morgan’s foray into distributed ledger technologies and applications, because
JPMCoin isn’t a true cryptocurrency. It’s not intended to replace or even compete with cryptos like Bitcoin. This is an application of distributed ledger technologies (DLT) to improve specific business cases that JP Morgan and their institutional clients have.”
Joe DiPasquale, CEO of BitBull Capital, a cryptocurrency hedge fund, took another view saying:
"JP Morgan's launch of JPM Coin is a vote of confidence for blockchain technology, and yet another indication that blockchain and cryptocurrencies are part of the future of finance. JPM Coin may even be able to compete with Ripple (XRP) in the future, and given JP Morgan's reputation and branding, it may be more successful in garnering support and adoption from major financial institutions, compared to Ripple or Stellar (XLM)."
This story originally appeared on BlockchainBeach.com. You can read it at https://www.blockchainbeach.com/j-p-morgan-creates-jpm-coin-for-institutional-clients-payments/