- Engineers at the lender have created the “JPM Coin,” a digital token that will be used to instantly settle transactions between clients of its wholesale payments business.
- Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank.
- While J.P. Morgan’s Jamie Dimon has bashed bitcoin as a “fraud,” the bank chief and his managers have consistently said blockchain and regulated digital currencies held promise.
The lender moves more than $6 trillion around the world every day for corporations in its massive wholesale payments business. In trials set to start in a few months, a tiny fraction of that will happen over something called “JPM Coin,” the digital token created by engineers at the New York-based bank to instantly settle payments between clients.
J.P. Morgan is preparing for a future in which parts of the essential underpinning of global capitalism, from cross-border payments to corporate debt issuance, move to the blockchain. That’s the database technology made famous by its first application, bitcoin. But in order for that future to happen, the bank needed a way to transfer money at the dizzying speed that those smart contracts closed, rather than relying on old technology like wire transfers.