According to a press release, J.P Morgan has unveiled its native Token dubbed as JPM coin. This is the first US Bank-backed Cryptocurrency and is expected to revolutionize payment transaction solutions for the bank’s clients.
This coin will be an on-platform Token of the J.P. Morgan Blockchain platform that is designed to support the transfer of payment between institutions with accounts on the bank’s network. The DLT ecosystem offers instantaneous services that are ideal for the needs of the modern-day world.
JPM Coin Is A Blockchain-Oriented Coin
In most Blockchain platforms, Digital Tokens are designed to support the on-platform activities of users. In this case, JPM Coin is developed with features that offer solutions to a faster exchange of value including money between peers in a secure ecosystem.
The area that J.P. Morgan bank is targeting in the deployment of the DLT platform is institutional clients. In some instances, these clients require banking services for peer-to-peer transactions often involving large amounts of money. This has been raising logistical challenges as well as transactional verification details in ensuring that the internal systems do not commit any error or penetrated by hackers.
For this reason, JPM Coin and the J.P. Morgan Bank is using the customized Blockchain network to offer an advanced banking product based on a Digital Currency.
About J.P. Morgan’s JPM Coin
JPM Coin is the premier US bank-backed Cryptocurrency. It is neither a standard Stablecoin nor a usual Cryptocurrency such as Bitcoin or Ethereum. Rather, it is a hybrid version of both.
It is important to note that the JPM Coin is not a standard Cryptocurrency because Cryptos are collateralized and their value is specific to a Token. On the other hand, fiat-based Stablecoins are reserves held at banks to act as collateral for Cryptos in order to give them intrinsic value.
Meanwhile, JPM Coin, a US Bank based fiat is a Token that is redeemable for fiat money on a 1:1 basis. It operates in a permissioned ecosystem allowing institutions to convert fiat money to JPM Coin for sending it to recipients who then reconvert it to fiat money to debit their accounts.
The project is in its prototype phase where only a small fraction of institutions are allowed to participate. In the course of the year, a Pilot will be launched to start transforming business-to-business money flows. </p
Although the bank is not planning to further extend the service to individual customers, it believes that end users of these institutions will eventually benefit when the institutions pass the benefits to them in terms of better services and lower costs.
J.P. Morgan Bank Is Setting A New Precedent
Under the management of CEO Jamie Dimon, America’s largest bank by asset base metrics is making history by incorporating a Digital Token-based product. The Coin is independent of the Crypto market volatility as it is only available on a redeemable basis as at the time being.
J.P. Morgan is promising to enable instant value transfer, decrease capital requirements, and reduce clients’ settlement risk and counter-party through liaising with regulators at every point.