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JPMorgan and the U.S. SEC meet to discuss the transition of capital markets to the blockchain.
Three JPMorgan executives met with the SEC's cryptocurrency working group to discuss capital market tools that can be moved on-chain and the best way to handle the change.
JPMorgan and the U.S. SEC meet to discuss the transition of capital markets to the blockchain.
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Executives from the largest bank in America met with the cryptocurrency working group of the SEC to discuss the regulation of digital assets and the potential consequences of capital markets transitioning to the blockchain.
JPMorgan Chase executives discussed with the SEC the "potential impact of current capital market activities transitioning to public blockchains", including areas that may change in the current model and how companies can assess the risks and benefits arising from these changes, according to an SEC memo shared on Tuesday.
The two groups also discussed JPMorgan's current "trading footprint" in the cryptocurrency space, including its existing digital platform that deals with repurchase agreements - a type of short-term borrowing in financial markets that falls under "digital financing" and "digital debt services."
JPMorgan also assessed where it can carve out a "competitive edge" - to stay ahead in the race as financial institutions look to blockchain technology for faster and cheaper transactions while opening new revenue streams through tokenized assets.
Agenda for the discussion on digital assets between JPMorgan and the cryptocurrency working group of the U.S. Securities and Exchange Commission. Source: U.S. Securities and Exchange Commission.
Three JPMorgan executives meet with the SEC.
Scott Lucas, Justin Cohen, and Aaron Iovini were the three JPMorgan executives who spoke with the SEC's cryptocurrency group.
Lucas is the head of digital asset markets at the company, while Cohen is the head of global derivatives development; both are managing directors at the firm.
Iovini is the Executive Director and Global Head of Digital Asset Regulatory Policy at JPMorgan.
JPMorgan Chase tests JPMD deposit tokens.
The JPMorgan meeting with the SEC comes as the company announced a pilot program for token deposits on Tuesday, with the bank launching a deposit token, JPMD, on the Coinbase blockchain.
Institutional clients of Coinbase can use JPMD for transactions once the pilot phase is completed, which is expected to last several months.
Base launched in August 2023 and is now the largest layer-2 blockchain by total value locked. Source: DefiLlama.
The day before, JPMorgan filed for a trademark for JPMD - which identified a range of services related to cryptocurrencies, including trading digital assets, transfers, and payment processing.
Related: Coinbase seeks approval from the U.S. SEC for "preferred stock" - report.
A JPMorgan executive says there are no plans yet for a stablecoin.
The JPMD trademark has sparked speculation that JPMorgan Chase will issue a stablecoin alongside other major banks; however, Naveen Malila, an executive in JPMorgan Chase's blockchain division, Kinexys, told Bloomberg that token deposits are a "better alternative to stablecoins" for institutions, noting that partial reserve backing makes them more scalable.
Deposit tokens represent dollar deposits held in customer bank accounts and operate within the traditional banking framework more than stablecoins, which are merely digital representations of fiat currencies backed by cash and equivalents.
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