The largest bank in the United States, JP Morgan Chase, said a large technology client has already begun using its own cryptocurrency to instantly send and settle payments around the world.
Dubbed ‘JPM Coin’, the stablecoin facilitates the transfer of payments between institutional clients, the latest step in Wall Street’s evolving approach to the crypto space. However, the coin will be available only for international payments for large corporate clients, that have undergone regulatory checks.
The name of the ‘big client’ that was involved in the trial was not mentioned. But, the development is massive for the wholesale payments business, as JP Morgan moves more than $6 trillion every day across more than 100 countries for its corporate clients. Additionally, it will be the first real-world applications for a cryptocurrency in banking, replacing decades-old networks like Swift, with more to come shortly after the international payments are tested.
Back in June, the New York-based lender started trials of its JPM Coin in conjunction with corporate clients with the ultimate aim of speeding up transactions, such as cross-border payments and corporate debt issuance.
Takis Georgakopoulos, the bank’s global head of wholesale payments, described the project as part of a far larger trend toward the tokenization of financial assets.
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JPMorgan, which its CEO, Jamie Dimon once bashed cryptocurrencies as a fraud that will not end well for its investors, created a new unit to handle its blockchain business called Onyx. Georgakopoulos told CNBC the new department employs more than 100 dedicated staffers.
“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” he added.
Moreover, JPMorgan is widening the experiment with the release of its own blockchain platform, Quorum, which allows institutions to keep track of financial data.
JPMorgan was not the only financial institution exploring the potential of tokenization and stablecoins as part of its efforts to modernize the legacy payment systems. Goldman Sachs also said it might consider launching a cryptocurrency after JPMorgan Chase has become the first US bank to launch its own digital token.