Key Points
U.S. banking giant JPMorgan is launching its alternative to a stablecoin called JPMD.
The new product is a so-called deposit token that’s designed to serve as a digital representation of commercial bank money.
JPMorgan said the benefit of launching a deposit token over a stablecoin is the close connection with traditional banking systems.“We see institutions using JPMD for onchain digital asset settlement solutions as well as for making cross-border business-to-business transactions,” Naveen Mallela, global co-head of Kinexys, J.P. Morgan’s blockchain unit, told CNBC Tuesday.
“Given the fact that deposit tokens would eventually be interest bearing as well, this would provide better fungibility with existing deposit products that institutions currently use,” he added.
Deposit token vs. stablecoin
JPMorgan said the benefit of launching a deposit token over a stablecoin is that it gives institutional clients a way to move money around faster and easier while still having a close connection with traditional banking systems.