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Breaking: JPMorgan Forges Ahead with Blockchain Deposit Tokens for Settlements

JPMorgan's deposit token is poised to revolutionize finance with blockchain, targeting faster settlements for corporate clients.
Breaking: JPMorgan Forges Ahead with Blockchain Deposit Tokens for Settlements

JPMorgan is inching closer to a new era in digital finance, according to a recent report on September 8th. Additionally, a deposit token built on the blockchain is in the final development phases despite the rollout being contingent on U.S. regulatory approval. Significantly, this new product will initially target corporate clients, aiming to expedite settlements and payments.

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Deposit Token vs. Stablecoin

Unlike stablecoins, usually issued by non-banking entities, a depository institution will issue JPMorgan’s deposit token. Additionally, the deposit token diverges from the bank’s existing JPM Coin.

The latter only enables transactions within JPMorgan, whereas the new token will allow transactions with other banks. Moreover, it will be suitable for various blockchain-based settlements, including trades in tokenized securities.

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Compliance and Regulatory Hurdles

JPMorgan has already laid most of the groundwork for this innovation. Last year, the deposit token was piloted in a collaborative project by the Monetary Authority of Singapore. Like JPM Coin, the new token will adhere to compliance measures. Hence, all transactions will go through know-your-customer and anti-fraud processes.

A spokesperson for JPMorgan emphasized the bank’s cautious optimism;

“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,” they said.

This development adds another layer to the ongoing competition among crypto tokens to speed up financial settlements. Besides JPMorgan, PayPal recently launched its stablecoin, PYUSD, to get a slice of the pie. Consequently, established players like Circle are broadening the reach of their offerings to stay competitive.

According to Umar Farooq, CEO of JPMorgan’s web3 arm Onyx, deposit tokens on public blockchains are “the next step in the evolution of digitized commercial bank money.”

JPMorgan’s move into blockchain-based deposit tokens isn’t just a leap forward for the bank but also a significant marker for the financial industry. Although the system will be operational once regulatory approval is obtained, JPMorgan’s readiness suggests that the impact on cross-border transactions could be transformative once the green light is given.

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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