JP Morgan (NYSE:JPM) is putting final touches on its much-awaited cryptocurrency JPM Coin. Bloomberg Japan reports that the financial institution is to start trials on the coin with corporate clients, as it also eyes regulatory approval for its use in the mainstream financial sector.
JP Morgan Crypto
JPM Coin runs on Quorum, which is a private version of the Ethereum network, developed by the bank. The coin is to function as a stablecoin where fiat cash is to be deposited in exchange for the token before one is allowed to carry out transfers via a distributed ledger. Recipients of the tokens will be able to convert any amount of the tokens into cash.
While the stablecoin is pegged on the US Dollar, JP Morgan Chase intends to extend it to other fiat currencies. Extending it to other fiat currencies will seek to address the strong interest from clients in Europe and Japan. Pegging the JPM Coin to fiat currency seeks to avert big fluctuations in value given the high levels of volatility in the sector.
JPM Coin Purpose
JP Morgan Chase venturing into the cryptocurrency space does not come as a surprise. The bank is seeking to take advantage of the growing demand for digital assets at a time when mainstream adoption is gathering pace. With the launch of the JPM Coin, the bank aims to provide retail and institutional investors a way of speeding up bond transactions as well as intercompany remittances.
“We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized,” said Umar Farooq, the investment bank’s head of digital treasury services and blockchain.
In addition to investing in JPM Coin, the bank has also taken a keen interest in the underlying blockchain technology. Quorum is the bank’s decentralized network that will support crypto transactions. JP Morgan has also inked a strategic partnership with software giant Microsoft Corporation to handle any technical difficulties that might arise on the blockchain network.
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