A naukri.com initiative
Pymnts
17h
302
Image Credit: Pymnts
JPMorgan’s New Deposit Token Shows Banks Are Reconsidering Institutional Ledgers
- JPMorgan Chase announced plans to launch a 'deposit token' named JPMD for institutional clients only, backed by fiat deposits.
- These tokens are minted by JPMorgan and transmitted to clients through smart contracts on the Base network.
- The launch coincides with the U.S. Senate passing the GENIUS Act, providing regulatory clarity for tokenized deposits.
- JPMorgan's move with deposit tokens may influence how large financial institutions adapt to tokenized environments for settlement efficiency and compliance.
- Other banks like Bank of America and Citigroup are reportedly considering launching similar stablecoins or tokens.
- Unlike stablecoins, JPMD is a deposit token directly linked to client balances at JPMorgan, subject to standard banking regulations.
- The strategic intent behind using a regulated deposit token is to maintain traditional banking rigor in a digital setting.
- JPMD operates on the Base network, showing JPMorgan's cautious approach towards balancing control and interoperability.
- Deposit tokens like JPMD cater to institutional needs, including integration with treasury systems, interest accrual, and securities settlement utility.
- The move towards tokenized deposits aligns with calls for stablecoins to be backed 1:1 by U.S. Treasuries and subject to audits.
Read Full Article
18 Likes
For uninterrupted reading, download the app