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JPMorgan Chase finally realizes its crypto ambitions with the launch of JPMD. After filing its trademark application earlier this week, the bank launches its “deposit token” on Coinbase’s Base. How does this token work, and what stakes lie behind this strategic choice?
In Brief
JPMorgan launches its JPMD token on the Base blockchain, reserved for approved institutions.
Unlike stablecoins, JPMD remains within the scope of the traditional banking system.
The bank promises better scalability, potential interest earnings, and enhanced regulatory security.
JPMorgan Revolutionizes Finance with Its JPMD Token on Base
JPMorgan officially launches its JPMD pilot project on the Coinbase Base blockchain.
Naveen Mallela, head of Kinexys’ blockchain division, announced to Bloomberg the imminent transfer of tokens to the exchange platform. This confirmation follows the mysterious “JPMD” trademark filing on June 15.
The choice of Base as the technical platform is strategic. Indeed, this layer 2 blockchain, built on Ethereum, currently dominates the scalability solutions market. In one year, its total value locked (TVL) has more than doubled, a sign of growing trust within the ecosystem.
Initially, JPMD transactions will be denominated in dollars. However, other currencies could be added, pending future regulatory approval.
The major novelty of JPMD lies in its hybrid nature. Unlike traditional stablecoins, backed by often external liquidity reserves, JPMD integrates directly with the banking system.
It represents real dollar deposits held at JPMorgan, thus creating an unprecedented link between traditional finance and blockchain.
The testing phase is expected to last several months before opening to Coinbase institutional clients. A gradual approach, true to the banking giant’s strategic caution.
Claimed Superiority Over Stablecoins
According to Naveen Mallela, head at Kinexys, deposit tokens represent a “superior alternative to stablecoins” for financial institutions.
Behind this statement lies a strategic positioning that JPMorgan intends to clarify: that of a digital asset anchored in the banking system, designed to meet the cash management needs of large companies and institutions.
Unlike stablecoins, which require a 100% guarantee by fiat currency reserves or Treasury bonds (such as USDC or USDT), deposit tokens adopt a fractional reserve model, similar to what traditional banks practice for their deposits.
This mechanism potentially allows greater usage flexibility, better capital circulation, and lower emission costs. That said, this structure also implies increased exposure to liquidity risks in the event of massive withdrawals or loss of confidence.
One of JPMorgan’s highlighted advantages remains JPMD’s ability to generate interest. If the bank implements this option, the token will stand out from traditional stablecoins, most of which do not pay holders. This feature would make it a more attractive cash management tool for large corporations and funds.
In this context, deposit tokens do not necessarily aim to replace stablecoins, but to offer a regulated, banking, and potentially more profitable alternative, especially in institutional environments where compliance and stability are priorities.
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Passionné par le Bitcoin, j’aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l’outil qui peut rendre cela possible.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
