NEW YORK—Just days after the Senate approved the GENIUS Act, JPMorgan Chase said it will introduce its own stablecoin-like token called JPMD.
The banking giant told CNBC it’s planning to launch a so-called deposit token on Coinbase’s public blockchain Base, which is built on top of the Ethereum network. Each deposit token is meant to serve as a digital representation of a commercial bank deposit, CNBC reported.
“JPMD will offer clients round-the-clock settlement as well as the ability to pay interest to holders,” according to CNBC. “It is a so-called ‘permissioned token,’ meaning it is only available to JPMorgan’s institutional clients — unlike many stablecoins, which are publicly available.”
‘Better Fungibility’
“We see institutions using JPMD for onchain digital asset settlement solutions as well as for making cross-border business-to-business transactions,” Naveen Mallela, global co-head of Kinexys, J.P. Morgan’s blockchain unit, told CNBC. “Given the fact that deposit tokens would eventually be interest bearing as well, this would provide better fungibility with existing deposit products that institutions currently use.”
Deposit Token vs. Stablecoin
JPMorgan told CNBC the benefit of launching a deposit token over a stablecoin is that it gives institutional clients a way to move money around faster and easier while still having a close connection with traditional banking systems.
A stablecoin is a type of digital token that’s designed to be pegged 1:1 to the value of a fiat currency at all times.
The recently passed GENIUS Act, which has companion legislation in the House that has yet to pass, is designed to create a regulatory framework around cryptocurrency.
