JP Morgan Chase is considering to start the trial of its much anticipated JPM Coin with its corporate customers, according to a Bloomberg Japan report.
Tuesday’s report detailed that the bank is seeing interest from clients from the United States, Europe, and Japan for the introduction of its digital currency for speeding up bond transactions and intercompany remittances.
“We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized,” Umar Farooq, JP Morgan’s head of digital treasury services and blockchain, told Bloomberg.
However, according to Farooq, there are many hurdles in the path of blockchain technology in terms of licensing and approvals.
“The technology is very good, but it takes time in terms of licensing and approval. It must be explained,” Farooq added.
Blockchain in a centralized environment
JP Morgan announced its digital currency in February with an aim to use it to settle transactions of its corporate clients, increasing settlement efficiency. The currency is pegged to fiat to avoid any fluctuations in its value. The use of the currency is also limited within the bank’s ecosystem as it cannot be traded in the secondary markets.
The Wall Street giant is also investing heavily on blockchain technology and has developed a private decentralized network, called Quorum, based on Ethereum. It is also trying to capture the interbank market and on-boarded more than 200 banks on its Interbank Information Network (IIN).
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According to Farooq, the bank needs some regulatory approvals before initiating the pilot transactions.
The US bank has also partnered with Microsoft to handle the technical difficulties faced by its blockchain customers.
“We are a bank, and technical support for customers using quorum is not a core task,” Farooq added.