According to a report by CNBC on Thursday, JPMorgan Chase bank has announced its intention to create an in-house settlement cryptocurrency. This coin will harness blockchain technology to improve the speed and security of payments and wire transfers.
JPMorgan is widely known to have held negative views against cryptocurrencies in the past. CEO Jamie Dimon regularly makes critical comments on Bitcoin and other blockchain assets, yet the bank appears to be coming around recently. On January 30, we reported on a release made by Joyce Chang, the chair of global research at the firm, in which she stated, “blockchain… will provide marginal improvements” to trade finance and other areas of finance within three to five years. However, improvements will come through the blockchain technology itself and not the on-chain cryptocurrencies.
Umar Farooq, JPMorgan’s head of blockchain technology, is very positive about the move, reportedly saying, “The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this. Even if this was limited to JPM clients at the institutional level, it should not hold us back.”
Developers at the bank are busy developing the coin, which has been named JPM Coin. The coin will undergo tests and further development before its real-world trial starting “in a few months”. Eventually, this coin will become part of the bank’s larger blockchain infrastructure, processing a large part of the bank’s transactions.
JPMorgan’s $6 million a day wholesale payments business is the planned use case for the coin. Settlement times will be cut from days to moments, a major improvement in contrast to existing systems such as SWIFT.
The implications of this cryptocurrency adoption is huge, for both the existing cryptocurrency market and the financial business market. “Pretty much every big corporation is our client, and most of the major banks in the world are, too,” Dimon said.
The report states that JPM Coin is going to be based on the Quorom blockchain at first, but expansion into other blockchains and to other currencies is planned: “Over time, JPM Coin will be extended to other major currencies. The product and technology capabilities are currency agnostic.” Even though the coin’s primary purpose will be to facilitate international payments by large corporate clients, instant settlement for securities issuance is another area it will assist.
Source: https://www.coindesk.com/jpmorgan-moving-its-in-house-crypto-to-real-world-trials-report, image from coinfirmation.com