Crypto news

JPMorgan ventures into deposit tokens for settlements.

According to a Bloomberg report, financial giant JPMorgan is venturing further into the cryptocurrency realm by developing a blockchain-powered solution for cross-border transactions.

However, the system’s availability is contingent on regulatory approval from authorities in the United States.

JPMorgan has reportedly built most of the necessary infrastructure to support the new deposit token,

which will initially be launched for corporate clients to facilitate faster payments and settlements.

Unlike stablecoins typically issued by non-bank private entities,

deposit tokens represent deposit positions and are issued on a blockchain by depository institutions.

It’s important to note that this product is distinct from JPM Coin,

which already enables corporate clients to transfer dollars and euros within the financial institution.

The new deposit token, on the other hand, will facilitate transactions with other banks and support various forms of settlements on a blockchain,

including trades involving tokenized securities.

Compliance-wise, the deposit token aligns with JPM Coin as it undergoes robust know-your-customer and anti-fraud processes.

As part of the Project Guardian initiative led by the Monetary Authority of Singapore,

the token underwent a successful pilot in a single transaction last year,

demonstrating its potential within the cross-industry collaborative effort.

JPMorgan Supports Deposit Tokens as Stable and Reliable Solution

In a demonstration of its ongoing support for deposit tokens,

JPMorgan highlighted their potential for stability and reliability compared to other similar solutions like stablecoins and central bank digital currencies (CBDCs).

This endorsement was made in February, showcasing the bank’s recognition of the value offered by deposit tokens.

The introduction of JPMorgan’s deposit token initiative not only expands its range of blockchain-based solutions but also intensifies competition among stablecoin issuers.

PayPal, a prominent player in the fintech industry,

recently entered the race for faster settlements powered by crypto tokens by launching its own stablecoin in early August.

This move prompted traditional competitors such as Circle to enhance the adoption of their stablecoin,

USD Coin, by expanding its availability across six additional blockchains in the U.S. market.

This evolving landscape indicates a growing focus on leveraging digital tokens for efficient and secure transactions,

with major financial institutions and fintech companies vying to provide innovative solutions in the quest for faster settlements.

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