The system referred to as the JPM Coin is currently at the prototype phase, allowing institutional customers to make on-the-spot remittance to other bank customers.
Clients would obtain JPM Coins that could be funneled to other clients who will be at liberty to reclaim the amount. The model is based on US dollars, but can be extended to other fiat currencies, says the bank.
Through a posting on its website, the company said that the structure uses digital leader technology and is being evaluated with a handful of institutional customers with intentions to be widened into a pilot study in due course.
The system is meant for business-to-business dealings, not at this juncture for ordinary citizens.
Regarding JPM Coin, the bank said “JPM Coin is currently a prototype. As we move towards production we will actively engage our regulators to explain its design and solicit their feedback and any necessary approvals.”
By unveiling the system, JPMorgan turns out to be the first big bank with specific plans to allow customers to deal with cryptocurrencies.
It is worth remembering that JPMorgan CEO Jamie Dimon has controversially discredited cryptocurrency Bitcoin as a “fraud,” despite working on blockchain technology, the underlying technology behind bitcoin. The bank said “We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated.”
“Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.”