The $4 trillion monetary establishment is piloting “deposit tokens” on Coinbase’s Ethereum Layer 2 blockchain, Base.
JPMorgan Chase, the biggest financial institution in america by belongings underneath administration (AUM), with $3.8 trillion as of 2024, based on S&P World, is testing its personal dollar-pegged asset, dubbed a “deposit token,” on Coinbase’s Ethereum Layer 2, Base.
Bloomberg reported on Tuesday afternoon that JPMorgan is piloting “a token called JPMD that represents dollar deposits at the world’s biggest bank, as financial institutions deepen their push into the digital asset sector.” The transfer comes simply two days after the establishment filed a trademark software for digital asset providers.
JPMorgan has additionally printed its deposit token whitepaper, touting the design as “the key to a safer tokenized economy.”
Deposit tokens are transferable tokens issued on a blockchain however backed by a licensed depository establishment with proof of a deposit that may be claimed in opposition to the issuer.
This mechanism presents a stablecoin and CBDC different that’s backed by deposit insurance coverage, much like conventional financial institution deposits. Via deposit tokens, people and establishments can settle funds on the blockchain with business bank-backed belongings, doubtlessly ushering in a brand new period of security and sustainability for onchain funds.
JPMorgan additionally printed a bit within the Monetary Instances, explaining that 97% of institutional traders assume tokenization is poised to revolutionize fashionable finance, and that “the agility of blockchain technology combined with the commercial bank money will transform the future of financial services.”
