JPMorgan moves into deposit tokens for settlements: Report
Financial giant JPMorgan is making another move into the crypto space with a new blockchain-based solution for cross-border transactions, reveals a report by Bloomberg. The system, however, won't be available until the bank receives the green light from regulators in the United States.
JPMorgan has reportedly developed most of the infrastructure to run the new deposit token, which will be first launched for corporate clients to speed up payments and settlements. Deposit tokens are issued on a blockchain by a depository institution to represent a deposit position. The solution contrasts with stablecoins, which are usually issued by a non-bank private entity.
The product is also different from its JPM Coin, which already allows corporate clients to transfer dollars and euros across the financial institution. The new deposit token, meanwhile, will allow transactions to other banks and is suitable for different forms of settlements on a blockchain, including trades of tokenized securities.
The deposit token, however, shares similarities with the JPM Coin in terms of compliance, since its transactions would go through know-your-customer and anti-fraud processes. Last year, the new token was piloted in a single transaction as part of the Project Guardian, a collaborative cross-industry effort pioneered by the Monetary Authority of Singapore (MAS) of Singapore.
1/3 Embrace, extend, extinguish? @OliverWyman & @jpmorgan renamed them deposit "tokens" (https://t.co/XDrHXxLrbq)...
Related: PayPal’s PYUSD struggles with early adoption — Nansen
“Deposit tokens bring plenty of potential benefits, but we also appreciate that regulators would want to be thoughtful and diligent before any new product gets developed and used,” a JPMorgan
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