According to a Bloomberg report on September 7th, JP Morgan Chase & Co. is taking another step into the cryptocurrency space with a new blockchain-based cross-border transaction solution. However, this system won’t be available until the bank receives approval from U.S. regulatory authorities.
Currently, JP Morgan has developed most of the infrastructure to operate the new token. Initially, this token will be introduced to corporate clients to expedite cross-border payments. Later on, the company will expand its usage to individual customers.
Notably, the new token will be custody-issued on the blockchain to represent deposit ownership. This approach is in contrast to stablecoins, which are typically issued by non-bank private organizations.
Moreover, this product distinguishes itself from JPM Coin, a token that has already allowed corporate clients to transfer USD and EUR through the financial institution. In contrast, the new token will facilitate transactions with other banks and be compatible with various forms of blockchain-based payments, including encrypted securities transactions.
Nevertheless, the new token will still share similarities with JPM Coin in terms of compliance, as all its transactions will undergo Know Your Customer (KYC) procedures.
Previously, JP Morgan has consistently expressed optimism about deposit tokens, believing that these assets will become a “widely used form of money.” One of the company’s pilot projects in 2022 also involved deposit tokens.