JPMorgan Chase, a leading mainstream financial firm has declared that it will come up with its cryptocurrency ‘JPM Coin.’ JPMorgan’s involvement in the cryptocurrency world will be a huge step forward for the Wallstreet’s status over digital currencies.
However, the financial giant has been taking a negative stance over cryptocurrencies until now. The CEO at JPMorgan, Jamie Dimon stated in 2017 that if any employee caught trading Bitcoin than he would be fired for being “stupid.” He considered Bitcoin a “fraud.” Now, the firm announced on this Thursday that it is going to launch its own developed digital token for real-world use. With that, JPM proves itself to be the first major United States bank to introduce such digital asset. The move by JPM will be supportive for cryptocurrencies like Bitcoin and Ether as far as Wall Street’s approach is concerned.
The newly announced crypto coin will be used to quickly settle transactions between clients of its wholesale payments business. Initially, a very small part of transactions will be processed using the cryptocurrency. With the launch of this coin, the firm will expand its edges to crypto services, and also will make the concept of digital currencies more agreeable to its typically risk-averse corporate investors. Also, Umar Farooq, JPMorgan’s blockchain leader said,
“Clients engaged us, saying they need a way to move money onto the blockchain.”
Moreover, JPMorgan’s Chief Executive Mr. Dimon had a very harsh take on cryptocurrencies, while having a hopeful approach for the underlying blockchain technology. He noted that he acknowledges blockchain’s potential in the future of the global financial system. JPMorgan already holds a blockchain platform, Quorum, which offers services to several institutions to keep track of financial data.
The JPM coin will be designed to be backed by a dollar. The dollar support will provide stability to the coin while preventing it from uncontrolled price volatility. Thus the concept of JPM Coins seems similar to the stable coins. The coins will be issued to the customers after depositing dollars at the bank. On its initial stage, the coin can be used for real-life use cases like (1) for international payments for large corporate clients (2) for securities transactions and (3) for huge corporations which use JPM’s treasury services business to replace the dollars they have in subsidiaries across the world.