JPMorgan will expand JPM Coin, your own cryptocurrency, using integration with public blockchain. The announcement was made by the bank this Wednesday (12) and aims to expand circulation and scope) of digital assets in the market. The expansion of cryptocurrency will be carried out by Kynexis, which also gives its name to the institution’s own blockchain.
JPMorgan's cryptocurrency has properties similar to stablecoins (cryptocurrencies paired with other assets), despite not falling into this same category. In practice, JPM Coin functions as a tokenized version of the bank's customers' dollar bank deposits. By transforming deposited amounts into equivalent tokens, the institution allows users to make fast and efficient payments and transfers almost instantly and at significantly lower costs.
Expansion brings new uses to the token
Through this release, JPM Coin can be used as collateral by Coinbase customers. According to JPMorgan, the idea is to launch JPM Coin on other blockchains in the future, expanding asset access. The bank also intends to allow tokens to represent other fiat currencies, going beyond the dollar. Nonetheless, for that, awaits regulatory permissions.
The JPM Coin asset was first launched in 2020 on the public blockchain network Base, from cryptocurrency broker Coinbase. The use of blockchain technology enables continuous payments, 24 hours per day and at reduced rates, including in international operations. The expansion to Base comes after a testing period carried out between JPMorgan and the company, validating the viability of the solution on a large scale.
Other banks, like Citigroup, Santander and Deutsche Bank, are also exploring the use of blockchain and studying the development of their own digital assets, from stablecoins to tokenized bank deposits. The move seeks to modernize financial processes and increase the efficiency of the traditional banking system.
