J.P. Morgan, a U.S. Bank, Launches its own Stablecoin, JPM Coin

J.P. Morgan, one of the major U.S. Banks, has launched its own Stablecoin (cryptocurrency) called JPM Coin.

The newly introduced stablecoin was used in the test where money was transferred between a client account and a J.P. Morgan account instantaneously.

With USD $2.6 trillion on J.P. Morgan's balance sheet, each JPM Coin is 1:1 redeemable in fiat U.S. dollar held by J.P. Morgan. This means each JPM Coin can be redeemable for exactly one US dollar. The support for other major fiat currencies will added in the future.               

According to the announcement, JPM coin is not intended to be used as money but as an instrument to make instantaneous payments and exchange value between different parties using blockchain technology to reduce overall settlement time.

In the faq section J.P Morgan's official stance was stated as, "We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators. Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer."

The way overall transaction works is - A J.P. Morgan client first deposits to a designated account and then gets an equivalent number of JPM Coins. These newly received JPM Coins are then transferred over a blockchain network with other J.P. Morgan clients. At last, the holders of JPM Coins redeem those coins for USD at J.P. Morgan.

Quorum blockchain is used to issue JPM Coin. Developed for financial industry usages, Quorum blockchain is enterprise-ready distributed ledger and smart contract platform like Ethereum. The platform is designed to be used where high speed and high throughput processing of private transactions within a permissioned group of known participants is needed.

JPM Coin is not yet rolled out into production.