Deposit tokens can generate interest and are accepted by mainstream institutions such as Coinbase, providing an innovative model for the integration of traditional finance and digital assets, accelerating the competition among global giants.

Written by: Zhang Yaqi

Source: Wall Street Insights

As financial institutions continue to expand their presence in the digital asset space, Wall Street investment banking giant JPMorgan Chase has officially launched its dollar deposit token, JPM Coin, for institutional clients. This move aims to leverage blockchain technology for around-the-clock, near-instant payment settlements, marking a significant step for traditional finance in the tokenization arena.

Naveen Mallela, Global Co-Head of Kinexys at JPMorgan's blockchain division, stated in an interview that the deposit token named JPM Coin represents clients' dollar deposits at the bank and is now being rolled out to institutional clients. Users can send and receive funds via the Base public blockchain associated with Coinbase Global Inc., enabling payments to be completed in seconds and allowing for uninterrupted operation around the clock, fundamentally changing the traditional payment model that relies on business days and bank hours.

Reports indicate that the official launch of JPM Coin followed several months of trial operations, with participating companies including Mastercard, Coinbase, and B2C2. This move is a significant expansion for JPMorgan in the blockchain space and reflects a growing trend among large global financial institutions to explore the use of digital assets to enhance payment efficiency and reduce costs.

The release comes after the U.S. passed the "Genius Act," which regulates stablecoins, prompting many large enterprises, including Citigroup, Santander Bank, Deutsche Bank, and PayPal Holdings Inc., to actively experiment with digital asset payment solutions, indicating an increasing market acceptance of compliant digital currencies.

What is a Deposit Token?

A deposit token is a digital currency issued by commercial banks that represents a claim on existing customer deposits. Essentially, they are a tokenized version of funds already held in bank accounts, designed to facilitate easier transfers using blockchain networks.

This differs from stablecoins, which are typically pegged to fiat currencies and backed one-to-one by government bonds or other highly liquid assets. Naveen Mallela pointed out:

"We believe that while stablecoins have received a lot of attention, deposit-based products offer an extremely attractive alternative for institutional clients."

A key advantage of deposit tokens over stablecoins is that they can generate interest. Stablecoin issuers typically earn returns from their reserve assets, but this income is generally not passed on to token holders. In contrast, deposit tokens can pay interest to holders based on the interest generated from their bank deposits, which is particularly appealing to institutions with large balances, such as cryptocurrency trading firms that use stablecoins for fund transfers and as collateral. Naveen Mallela added that JPM Coin will be accepted by Coinbase as collateral, further expanding its use cases within the crypto ecosystem.

JPMorgan's Expansion Blueprint

JPMorgan has a clear future plan for JPM Coin. Naveen Mallela revealed that the bank plans to extend access to the token to its clients' clients in a later phase and to expand it to other currency denominations upon receiving regulatory approval. The bank has already registered the code JPME for a potential future euro deposit token.

Additionally, JPMorgan intends to extend JPM Coin to other blockchain networks. Its pilot program with the token code JPMD was announced as early as June this year.

Although financial companies have been exploring blockchain technology for over a decade, few applications have achieved commercialization, and their scale of use remains small compared to traditional markets. JPMorgan is one of the most active participants in the financial sector, operating a network called Kinexys Digital Payments (formerly JPMCoin), which allows corporate clients to transfer dollars, euros, and pounds at the bank.

Data shows that the network currently processes over $3 billion in transactions daily, but this still represents only a small fraction compared to the approximately $10 trillion processed daily by its payment department. However, as other banks like BNY Mellon and HSBC also explore or have launched deposit token services, the competition among traditional financial giants in the digital asset space is intensifying.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。