(15 February 2019 – USA) JPMorgan Chase announced plans to launch its own digital coins “JPM Coin”, that will be used to instantly settle transactions between the bank’s wholesale payments business clients.
The coin will be pegged to the US dollar, so its value will largely remain stable.
Chief Executive Office Jamie Dimon has been vocal is his criticism of bitcoin and cryptocurrencies saying they were a “fraud” and “worse than tulip bulbs”. While Mr Dimon has tempered his view, he has maintained his disinterest in bitcoin particularly.
Umar Farooq, head of digital treasury services and blockchain at JP Morgan, said that he sees three early applications for JPM Coin: international payments for corporates that are currently carried out over Swift; securities transactions; and as a replacement for dollars that massive firms hold at various subsidiaries around the world.
JPMorgan also said it believed in the potential of blockchain technology and expects its new digital coin to yield significant benefits for blockchain use by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.
The bank will begin trials in the coming months.