JPMorgan Chase has announced that it will be launching its own digital currency, the JPM Coin. The bank said that the coin will initially be available only to its large institutional clients, with tentative plans to make it available to a wider array of customers later in 2019. However, the current plans do not involve making the coin available to individuals.
According to the company, JPM Coin will be blockchain-powered and issued to customers when they deposit money in the bank. The currency can then be used to conduct transactions with other JPMorgan customers on the coin’s blockchain network:
The JPM Coin isn’t money per se. It is a digital coin representing United States Dollars held in designated accounts at JPMorgan Chase N.A. In short, a JPM Coin always has a value equivalent to one U.S. dollar. When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.
Many media outlets have documented JPMorgan’s complicated history with digital currency. The company’s CEO, Jamie Dimon, has spent years alternating between vitriolic criticism of cryptocurrencies like Bitcoin and attempts to claim that he has no interest in the technology. He even once asserted that he would not hesitate to fire any bank employees that he caught trading Bitcoin.
The company’s position on the technology has always been more nuanced, and its Thursday announcement helped to further clarify that stance:
We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators. Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.