Naveen Mallela, co-director of JPMorgan's blockchain platform Kinexys, announced this morning (6/18) that they will collaborate with the well-known exchange Coinbase to launch a pilot program for the deposit token JPMD and deploy it on the Base chain for testing. He emphasized: "This is the first time in history that a commercial bank has launched deposit tokens on a public blockchain."
Holders of the deposit token JPMD can earn interest.
Deposit tokens are a transferable digital currency, essentially "tokenizing" users' deposits in banks, enabling real-time settlement on the chain.
Mallela stated that JPMD represents the user's claim to physical deposits at JPMorgan, similar to a demand deposit, and can earn interest in the future. He further pointed out that deposit tokens are "superior" to stablecoins because they are based on the traditional banking fractional reserve system and enjoy deposit insurance protection, which mainstream stablecoins cannot currently achieve.
JPMD will be tested on Base, with institutional users from both parties being the main audience.
Just submitted a trademark application for "JPMD", JPMorgan originally planned to layout its own deposit token JPMD pilot program. Mallela stated that in a few days, a fixed amount of JPMD will be transferred from their own wallet to the well-known exchange Coinbase's blockchain Base for testing, primarily for their institutional users. Coinbase's institutional clients will also have the opportunity to use JPMD for trading in the future.
He added that JPMD will be priced in "USD", which is also the first time JPMorgan is testing deposit token products on L2. The entire pilot program will last several months, and if approved by regulators in the future, it will expand to more currencies and support more users.
Currently, Base is one of the most popular Ethereum L2s, with a total locked value of about $3.8 billion, mainly attracting memecoins and various DeFi projects.
Kinexys payment platform will continue to expand
JPMorgan has previously launched a blockchain payment platform called Kinexy and issued its own stablecoin, JPM Coin, for settling its banking transactions, having processed a total transaction amount exceeding $1.5 trillion to date.
JPM Coin adopts a 1:1 peg to fiat currency design, currently corresponding to USD, GBP, and EUR, mainly used for transactions and settlement services between large institutions.
Mallela stated that Kinexys will continue to expand in the future, and this time the launched JPMD deposit token targets institutional users who wish to use a product "backed by banks" and serve as a "stablecoin alternative".
JPMorgan has identified that deposit tokens will become mainstream.
As early as a few years ago, JPMorgan predicted in a white paper:
"Deposit tokens will become a widely used form of currency in the digital asset ecosystem, just like over 90% of the currency currently circulating in the market is in the form of bank deposits."
(JPMorgan registers the "JPMD" trademark to support its cryptocurrency business, stablecoin plan emerges)
This article JPMorgan and Coinbase jointly promote the JPMD deposit token pilot program, with Base as the preferred testing ground, first appeared on Chain News ABMedia.