The largest bank in the US, JPMorgan Chase, recently stated that it is going to launch its very own cryptocurrency, named JPM Coin. The new crypto will be redeemable for 1 USD and will have fixed value. Obviously, this means it is not going to trade like most of the other cryptocurrencies.
JPM Coin will be launched in an attempt to lower risks and costs for bank clients. This can make transfers instant and reduce how much capital bank clients need to hold. JPM Morgan Chase currently moves trillions of USD all around the world for customers.
The new cryptocurrency will be designed to initially be used by the major institutional customers. By the end of 2019 it is expected that more customers will be able to utilize it.
According to the bank, this all means that JPMorgan becomes the first US bank to successfully create and test such a digital coin. However, there is a smaller NY based bank, Signature Bank, that started handling business client transactions with a proprietary blockchain platform since January 1, 2019. Similarly to the JPM Coin, transactions are pegged to the USD.
Joseph DePaolo, Signature Bank CEO, declared about the JPMorgan Chase announcement:
We understand they’re a $2 trillion bank and we’re a $47 billion bank. If you’re not into blockchain technology as a bank, you won’t be around in three to seven years.
In 2017 we saw Jamie Dimon, JPMorgan CEO, declaring that bitcoin was “far too dangerous”, “stupid” and “fraud”. However, he always did declare that blockchain technology was supported for payment tracking. What was controversial was the addition that any bank employee that is caught trading bitcoin will be fired. Obviously, the harsh assessment quickly changed.
The official statement by JPMorgan Chase about cryptocurrencies is now:
We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators.
The launch of JPM Coin was first announced by CNBC.