JPMorgan Brings Dollar Deposit Token to Coinbase's Base Network: Report
JPMorgan Chase has deployed its deposit token, JPM Coin (JPMD), on Coinbase's Base network, marking its first public blockchain implementation. Unlike stablecoins, JPMD represents on-bank deposits and facilitates instant transactions 24/7 for institutional clients through Ethereum's layer-2 network. Plans include expanding access beyond institutional clients, developing new currency tokens like JPME (euro-based), and utilizing additional blockchains subject to regulatory approval. This move follows months of trials with Mastercard, Coinbase, and B2C2. While challenges such as data privacy, blockchain reliability, and anti-money laundering persist, experts note the potential for higher efficiency and the evolution toward a 24/7 financial ecosystem. JPM Coin will also serve as collateral on Coinbase, emphasizing its competitive edge over stablecoins as a yield-bearing alternative. The deployment culminates a year of JPMorgan's digital asset growth, including tokenized U.S. Treasuries and crypto-backed loans, reinforcing the adoption of blockchain technology in traditional banking systems despite inherent vulnerabilities in bridging on-chain and off-chain environments.
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JPMorgan Launches Deposit Token on Public Blockchain
JPMorgan Chase has launched its deposit token on Coinbase's Base network, marking the bank's first deployment of a native payment product on a public blockchain. The banking giant brought JPM Coin (JPMD) to institutional clients, enabling instant transactions via the Ethereum layer-2 network instead of taking multiple business days, according to a Bloomberg report.
Major Expansion in Blockchain Operations
The deployment represents a significant expansion for JPMorgan's blockchain initiatives, which have primarily operated on private, permissioned networks since the bank began experimenting with distributed ledger technology in 2019. Unlike stablecoins, which are privately issued and backed by external reserves, JPMorgan's deposit token represents money already held as deposits within the bank, effectively creating a blockchain-based version of commercial bank money. It carries the same claim on the bank as a traditional account balance, but it is currently available only to institutional clients while regulators evaluate its broader use.
Testing Period and Future Plans for JPMD
JPMorgan's token deployment follows a months-long trial involving Mastercard, Coinbase, and liquidity provider B2C2, per the report. The bank plans to extend JPMD access beyond institutional clients and introduce new currency versions, such as a euro token (JPME), while expanding to additional blockchains pending regulatory approval.
Challenges and Opportunities in the Blockchain Ecosystem
Musheer Ahmed, Founder and Managing Director of Finstep Asia, highlighted key challenges for banks adopting blockchain technology: addressing data privacy concerns, managing blockchain outages, mitigating anti-money laundering risks from non-whitelisted wallets, and ensuring 24/7 operational oversight—capabilities that are not yet widespread. Despite these challenges, tokenized deposits will enable higher efficiency and help move financial institutions towards a 24/7 financial ecosystem.
Deposit Tokens vs Stablecoins
Plans for the deposit token pilot were first announced in June, dispelling rumors that JPMD might be a stablecoin. Those speculations gained traction after JPMorgan filed a trademark application with the U.S. Patent and Trademark Office. "Moving money should take seconds, not days," Base stated in June. Naveen Mallela, global co-head of JPMorgan's blockchain division Kinexys, emphasized that deposit tokens provide institutions with an edge over stablecoins, calling them “a compelling alternative” that “can be yield-bearing.” Furthermore, JPM Coin will be accepted as collateral on Coinbase.
JPMorgan's Year of Digital Asset Expansion
The debut of JPMorgan's deposit token caps a year of significant digital asset advances, from the settlement of tokenized U.S. Treasuries on Chainlink in May to enabling 24/7 client settlements with Brevan Howard Digital in August. More recently, the bank has allowed institutional clients to use Bitcoin, Ethereum, and crypto ETFs as loan collateral.
Risks in Bridging Traditional and On-Chain Finance
Mitchell Amador, CEO of Immunefi, remarked that blockchains themselves have proven remarkably safe, with infrastructure reliability. However, the greatest risks lie in the bridge between traditional banking systems and on-chain environments, which inherits vulnerabilities from both sides. He noted that DeFi protocols have maintained losses below 1% of total value locked this year, a benchmark that banks must match as they bring deposits on-chain.