- JP Morgan's digital coin, the JPM Coin, is being used for the first time commercially.
- The stablecoin is being used by a large technology client to send payments globally.
- The bank has set up Onyx, an umbrella organization for its blockchain and digital currency initiatives.
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JP Morgan is using its digital currency, JPM Coin, for the first time commercially this week. It is being used by a large technology client to send payments globally, according to Takis Georgakopoulos, the firm’s global head of wholesale payments.
The large technology client was not named, although more clients are reportedly being on-boarded. These developments have given the international bank confidence that the future lies in blockchain technology.
To that end, the firm has launched Onyx, an umbrella organization for the international giant’s blockchain and digital currency initiatives. With over 100 employees, it’s described by Jamie Dimon, chairman and CEO of the bank, as being at “the forefront of a major shift in the financial services industry.” Dimon added that this “reflects JP Morgan’s commitment to innovation as we continue to build cutting-edge technology that delivers a better, faster and more inclusive financial system.”
What is JPM Coin?
JPM Coin is a stablecoin that represents US dollars held in the bank’s accounts; in other words, its value is tied to that of the US dollar. It was created and tested by the bank in February 2019, and is described by Umar Farooq, head of digital treasury services and blockchain, as a coin “designed to make instantaneous payments using blockchain technology.”
One potential use case for JPM Coin is in cross-border payments. JP Morgan, which reportedly moves more than $6 trillion a day in over 100 countries, could usher in an era where blockchain technology allows banks to confirm international payments quickly and in a cost-effective way.
In addition, blockchain technology would provide a solution for the painful costs that occur when banks suffer errors in processing payments from one country to another.
Blockchain and banking
Blockchain technology can help JP Morgan cut costs in processing checks. According to Georgakopoulos, “using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today.”
Following major investments in Bitcoin from other corporate giants such as MicroStrategy and Square, JP Morgan’s move could boost blockchain further into the mainstream. Just last week, blockchain technology and the wider cryptocurrency industry received another major boost, as Paypal announced it is launching buying and selling features for cryptocurrencies.