called Base This move is part of the bank's effort to meet growing demand from its customers who want to use bank deposits in the world of crypto The tokenized deposit is known as JPM Coin or JPMD Unlike stablecoins which are digital currencies tied to an asset JPMD represents real bank funds and can earn interest This makes it different from other digital cash options on public blockchains
The bank first started using blockchain technology in 2019 with a private version of Ethereum called Kinexys The new step to Base allows institutional customers to use JPMD for payments or to keep collateral for transactions This is useful for clients who need to pay margins or settle deals in a fast and efficient way Traditional bank accounts have timing limits and stablecoins carry different risks so using JPMD can be safer for some institutions
JPMD is only available to whitelisted clients who are onboarded to the bank’s system This keeps the process controlled and secure The bank still manages the token and has the ability to move it between addresses This way it can ensure that all transactions are safe and comply with internal rules
The use of JPMD can be compared to stablecoins in some ways It can be used for payments or as collateral on trading platforms but it is backed by real bank deposits Some experts say it is like a cousin of stablecoins since it works in a similar space but is limited to a bank network The bank wants to make sure its customers can use the product in a secure and reliable way while exploring new opportunities in digital finance
JPMorgan sees public blockchains as a place where many of its customers will operate in the future The bank has tested its systems for years and believes it can manage risks properly The smart contracts are controlled by the bank and the keys are stored securely This gives confidence to clients who may be new to crypto or prefer to work with trusted institutions
Overall JPMD on Base shows how banks