(Reuters) – JPMorgan Chase & Co said on Thursday it plans to launch its own digital coins, called “JPM Coin”, that customers will be able to use for instant transfer of payments over a blockchain network.
FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files/File Photo
The largest U.S. bank by assets said customers, on depositing money at the bank, will be issued the cryptocurrency that they will be able to use for transactions over the network with other JPMorgan clients.
The coin can be redeemed for a U.S. dollar, so its value will largely remain stable, the bank said bit.ly/2V0lFsV.
When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time, the bank said.
Chief Executive Officer Jamie Dimon once criticized the former high-flying bitcoin, calling it a “fraud” in 2017. Back then Dimon said cryptocurrencies are “worse than tulips bulbs,” referring to a famous market bubble from the 1600s.
He tempered his view a few months later, saying he regretted calling bitcoin a fraud, but maintained his disinterest in the cryptocurrency.
The bank said in a presentation on its website discussing the new JPM Coin that it was 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,” said JPMorgan’s Head of digital treasury services and blockchain Umar Farooq.
JPMorgan also said it believed in the potential of blockchain technology, and expects its new digital coin to yield significant benefits for blockchain use by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.
Last year, several big U.S. lenders including JPMorgan, banned the purchase of bitcoins by credit-card customers. Rival Goldman Sachs also ditched its plan to open a desk for cryptocurrency trading.
JPMorgan said its new coin, which will be issued on its in-house blockchain technology Quorum, was currently a prototype. The company plans to make the coin operable on all standard blockchain networks.
Reporting By Aparajita Saxena in Bengaluru; Editing by Shinjini Ganguli