Key Takeaways
JPMorgan Chase is preparing to launch the JPMD token on the Base blockchain, representing dollar deposits.
The token will be offered exclusively to institutional clients.
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JPMorgan Chase, the top US bank by total assets, will conduct a pilot program for JPMD, described by the bank as a deposit token, on Coinbase’s Base network, according to a new report from Bloomberg. JPMD is intended for use on public blockchains, but access will be restricted to institutional clients.
Naveen Mallela, global co-head of the bank’s blockchain division Kinexys, believes JPMD is a superior alternative to stablecoins for institutions.
“They are based on fractional banking, we think it is more scalable,” Mallela told Bloomberg. He added that the deposit token could offer advantages over stablecoins, including potential interest-bearing features and deposit insurance coverage in the future.
Kinexys, formerly known as Onyx, plays a direct role in the functioning of JPMorgan’s flagship digital payment solution, commonly known as JPM Coin.
Last year, JPM Coin and Onyx were rebranded as Kinexys and Kinexys Digital Payments as part of the bank’s strategy to expand their capabilities beyond the original JPM Coin use case.
Kinexys Digital Payments will continue to operate and grow alongside the new JPMD token pilot, Mallela noted.
The bank will soon execute its first JPMD transaction by transferring a fixed amount of tokens from its digital wallet to Coinbase, using Base, known for its low transaction fees, fast settlement times, and growing adoption among dApps.
The bank plans to run the pilot for several months before expanding JPMD to additional currencies and client types, pending regulatory approval.
If executed, this would be the first time a leading US commercial bank has launched a deposit-backed token on a public blockchain. The move follows JPMorgan’s June 15 filing for the “JPMD” trademark.
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