JPMorgan Brings Its Deposit Token to the Ethereum Blockchain

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JPM Coin will now be available to the bank’s institutional clients on the Ethereum network, JPMorgan representatives told Bloomberg News Monday (Oct. 19).

Emma Landriault, global head of Kinexys Labs at JPMorgan’s blockchain unit Kinexys, said in an interview with Bloomberg that the bank expects JPM Coin to be used by crypto industry customers looking for a way to make payments via blockchain, as well as financial institutions seeking digital cash to settle or collateralize transactions of tokenized assets.

As Bloomberg notes, tokenization lets traditional assets like stocks be represented and transferred using blockchain networks. Banks have spent years exploring the technology, but much of that work has focused on private networks.

Shifting to public infrastructure brings Wall Street closer to the cryptocurrency ecosystem, giving them access to existing pools of liquidity and developer activity, the report added.

“We’ve clearly been in a year of further convergence between Wall Street and crypto,” Landriault said. “It’s not just Wall Street going to public chains, but the institutional web3 players getting more embedded and partnering with traditional financial institutions.”

In related news, PYMNTS wrote earlier this month that tokenization has a “definition problem,” as tokenized assets, tokenized deposits and stablecoins might all use distributed ledgers, but are economically different instruments.

“A tokenized security digitizes ownership or economic rights associated with an asset. A tokenized deposit represents commercial-bank money and remains a liability of the issuing bank,” the report said. “A stablecoin typically represents a claim structured separately from a traditional commercial-bank deposit and is designed to circulate more broadly, often across public blockchain networks.”

JPMorgan, the report added, offers what is perhaps the clearest example of how far production infrastructure can extend past experimentation. Kinexys said in April that its blockchain-based infrastructure had processed upwards of $3 trillion since launching and was averaging more than $5 billion in transactions each day.

PYMNTS wrote Monday about research from PYMNTS Intelligence showing that digital wallets might be an effective way for credit unions to get their members interested in stablecoins and cryptocurrency.

“A familiar wallet can work like a familiar dashboard in a new car, making an unfamiliar experience easier to navigate,” the report said. “For credit unions, the findings suggest that how members access digital assets deserves attention alongside which assets they offer.”