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JPMorgan Chase, the American multinational bank, is reported to be in the early stages of exploring a blockchain-based digital deposit token. A person familiar with the work stated that the bank won’t create the token unless the project is approved by US regulators.
JP Morgan is the world’s largest bank by market capitalization as of 2023. The digital deposit token would be used for speeding up cross-border payments and settlement; most of the infrastructure needed to run this new form of payment has been developed, according to Bloomberg.
The person who shared the news with Bloomberg asked not to be named as the matter is private. Moreover, he stated that the bank may launch the product for use by corporate clients less than a year after receiving the green light from regulators.
A JPMorgan spokesperson said, “We appreciate that regulators would want to be thoughtful and diligent before any new product gets developed and used.” Furthermore, he added that if the project got approved, the” blockchain infrastructure would be able to support the launch of deposit tokens relatively quickly.”
The spokesperson stated that issuing deposit tokens was already tested in a single transaction last year as a part of the Monetary Authority of Singapore’s Project Guardian. The project is a collaborative initiative aimed at executing secured borrowing and lending on a public blockchain-based network.
Umar Farooq, CEO of JPMorgan’s Onyx, a blockchain-based platform for wholesale payment transactions, said, “JPMorgan has co-innovated with MAS, leading to several industry-first products, and the introduction of tokenized deposits on a public blockchain is yet another milestone we look forward to launching.”
The bank has used blockchain technology several times before, and one of its latest projects has been JPM Coin, which was announced in 2019. JPM Coin is a stablecoin that’s used for business-to-business money transfers and runs on a private blockchain. Reportedly, the coin isn’t available on digital asset exchanges and is only available to a small number of institutional clients.