Announcement dispels widespread speculation that the JPMD product could be a stablecoin from JP Morgan bank.
JP Morgan Chase revealed its plans to launch a so-called deposit token, JPMD, on Tuesday (17), a day after a social media post generated widespread speculation that the bank would be launching a stablecoin.
The U.S. investment bank is expected to transfer an undisclosed amount of JPMD to the cryptocurrency exchange Coinbase in the coming days, said Naveen Mallela, co-head of the global blockchain unit at JP Morgan, Kinexys, in an interview with Bloomberg News on Tuesday.
JP Morgan defines deposit tokens as “commercial bank money” or “transferable tokens issued on a blockchain by a licensed depository institution that evidence a deposit claim against the issuer,” according to a Kinexys white paper.
The tokens, in development since 2023, are part of a type of blockchain-based asset that can be used for payment settlement.
The company's stock price fell 0.3% in Tuesday's trading.
Token will exist on Base.
The bank will issue its deposit token on Base, a layer two blockchain of Ethereum launched by Coinbase. The transfer will be denominated in U.S. dollars.
“Moving money should take seconds, not days,” said Base on Tuesday in a statement on social media. “The commercial bank is coming to blockchain.”
The token will be used in a pilot program for several months, according to Base. During this time, approved institutional clients of Coinbase will have the ability to use JPMD for transactions.
Later, other users will gain access to JPMD, and its currency denominations will be expanded, subject to regulatory approval.
The announcement dispels widespread speculation that JPMD could be a stablecoin — a rumor that gained traction on platform X on Monday. Cryptocurrency industry experts pointed to the asset's acronym and JP Morgan's filing details with the U.S. Patent and Trademark Office on Sunday as evidence that the token could be some kind of stablecoin.
Rumors circulated as major financial institutions increasingly adopt stablecoins, and just before the successful passage of stablecoin legislation by the U.S. Senate on Tuesday afternoon.
The revelation also comes amid JP Morgan's attempt to deepen its foray into the world of cryptocurrencies.
In May, reports emerged that JP Morgan and several other large banks were in discussions about the possibility of joining forces to issue a joint stablecoin.
JP Morgan has been experimenting with blockchain technologies since at least 2020, when it launched its blockchain initiative, Onyx. Now called Kinexys, the blockchain processes over $2 billion in daily transaction volumes.