The financial giant JPMorgan announced the launch of its own digital currency, JPM Coin, a stablecoin created on blockchain technology to implement digital payments.
October is a month of big news, now the United States financial services giant, JPMorgan, announces the official launch of its own stablecoin call JPM Coin, becoming the first banking entity in the United States to create and successfully test a digital currency with parity in a fiat currency such as the dollar. According to the entity's announcement, the new stablecoin, which is based on technology blockchain, will allow the instant transfer of value, making payments in real time between its institutional clients.
Although this is not JPMorgan's first foray into blockchain technology, the new stablecoin is designed to ensure faster settlement times on value transfers, and make instant payments between its customers. The entity has an Interbank Information Network (IIN), designed in 2017, which allows cross-border payments based on blockchain. Through this network, JPMorgan has managed to unite more than 170 banking entities around the world for the transfer of information quickly, securely and reliably.
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The future of digital payments
The head of JPMorgan's Digital Treasury and Blockchain Services, Umar Farooq, points out that a large part of the large corporations that exist worldwide are clients of the entity, as are most of the main banks in the world, so JPMorgan had an urgent need to create a digital currency that would allow it to facilitate the exchange of value between different parties.
“A regulated stablecoin makes supply chain payments with smart contracts less risky.”
According to Farooq, JPM Coin will initially be available for JP Morgan wholesale clients to carry out their trading operations. The 3 initial use cases that JPMorgan has designed for its stablecoin are intended to allow international payments to be made without the need to make bank transfers, allow the transfer of securities and provide treasury services for its institutional clients. On the other hand, the entity points out that through this new asset, it will allow the transfer of value between companies such as Western Union, in a few minutes, and that in the future it could extend its stable currency to other important fiat currencies.
Benefits of JPMorgan's new coin
For JPMorgan, blockchain is a technology that has great potential to lead the entity to faster settlement times, while also eliminating trust issues that exist around whether there really is a US dollar for every stablecoin that has been minted. , according to the entity.
“We have always believed in the potential of blockchain technology and support cryptocurrencies as long as they are properly controlled and regulated.”
In this sense, JPMorgan points out that it is an entity that has a balance sheet of 2,6 trillion dollars and that invests around 800 million dollars a year in cybersecurity to strengthen its system and platform, and provide protection and confidence to its clients. Likewise, the entity indicates that it complies with all current legislation and regulations of US regulators, such as anti-money laundering (AML) and Know Your Customer (KYC) regulations, to guarantee transparency in each of its operations. Therefore, as a globally regulated bank, it has the potential and opportunity to develop the innovative capabilities of the blockchain in a responsible manner, under the supervision of regulators.
Finally, JPMorgan points out that with its new stablecoin it can generate great benefits for other applications that are developed on this technology, by reducing the settlement and counterparty risk of clients, reducing capital requirements and allowing the instant transfer of value. Although JPMorgan points out this launch as a great technological feat, several analysts such as Ben Jessel, director of enterprise blockchain company Kadena, indicate which is mostly a marketing campaign, as the features JPMorgan prides itself on have been present in other digital assets for a long time.
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