JPMorgan has processed more than $1 billion in daily transactions via its digital asset, JPM Coin, solidifying its position as one of the most extensive uses of blockchain technology by a traditional financial institution.
The bank has ambitious plans to expand its utilization further, according to Takis Georgakopoulos, the Global Head of Payments, who also said that a similar asset designed for retail investors will be the next stop.
“JPM Coin gets transacted on a daily basis mostly in US dollars, but we again intend to continue to expand that.”
JPMorgan’s Next Focus: Retail Investors
In an interview with Bloomberg TV, Georgakopoulos highlighted the notable drawbacks of existing payment systems, such as low speed, which includes cut-off times, and delays in making payments, especially cross-border payments.
He also spoke about the inefficiencies when related to money and information moving separately, which makes it hard to reconcile, change, understand, and, most importantly, track.
The exec further pointed out that money is fungible, whereas individual activities are not, and went on to add,
“The reason why we created the JPM coin and in general we are looking at digital currency as a way to solve those issues. What we do with JPM Coin is the institutional side of that solution, working in a permissioned environment with companies that are trusted and trust each other so that they can move money within their ecosystem 24/7.”
While JPM Coin currently caters to institutional needs, Georgakopoulos said the next step for the company will be to create a retail version of the asset in order to bring the same efficiency to consumers.
He also emphasized that central bank digital currencies (CBDCs) offer one avenue for achieving this, but he highlighted the “potential” for banks to create commercial variations of such digital deposits that function like traditional deposits. However, due to their use of distributed ledger technology, they offer the same advantages, including 24/7 efficiency, cost-effectiveness, instantaneous transactions, and programmable payment methods.
JPMorgan’s Deposit Token
The latest development comes a little over a month after JP Morgan revealed exploring a new type of token to boost its cross-border payments and settlements. The new deposit token – which is expected to serve as a deposit claim against a commercial bank – could initially be denominated in USD before becoming available in other fiat currencies.
The American financial services giant, however, clarified that it does not intend to use the token as a replacement for stablecoins or the purchase of cryptocurrencies.
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