JPMorgan Pilots Deposit Token JPMD on Coinbase’s Base Network

JPMorgan Chase’s foray into the blockchain ecosystem continues, with the monetary establishment selecting the Base community to pilot its newly launched deposit token, JPMD. 

The pilot program was confirmed by Naveen Mallela, an government at JPMorgan’s blockchain division, Kinexys, who advised Bloomberg {that a} mounted quantity of JPMD tokens shall be transferred to crypto change Coinbase within the coming days.

The switch shall be facilitated via Coinbase’s layer-2 blockchain, Base, which launched in 2023 and at present has the biggest market share amongst Ethereum layer-2s, based on CoinGecko. 

Mallela stated the transaction shall be denominated in US {dollars}, with further currencies supported after regulatory approval is granted. 

Upon completion of the pilot section, which is anticipated to span a number of months, Coinbase’s institutional purchasers will acquire entry to JPMD for transactions, based on Mallela.

Related: Base briefly nears 1,000 TPS, making it pace aggressive with Solana

Deposit tokens are “superior” to stablecoins

The pilot testing was introduced days after JPMorgan filed a trademark utility for JPMD, which outlined a variety of crypto-related providers, together with digital asset buying and selling, transfers and fee processing.

Deposit tokens, particularly, symbolize greenback deposits held in prospects’ financial institution accounts. Unlike stablecoins — digital representations of fiat currencies backed by money and money equivalents — deposit tokens function throughout the conventional banking framework.

“From an institutional standpoint, deposit tokens are a superior alternative to stablecoins,” Mallela advised Bloomberg, noting that their fractional reserve backing makes them extra scalable.

The government famous that JPMD might probably pay curiosity sooner or later, setting it other than most stablecoins, which usually don’t generate yield.

However, yield-bearing stablecoins might acquire momentum over time, with some trade insiders suggesting that the highly effective US banking foyer is “panicking” over their potential to disrupt conventional monetary fashions.

According to sources near the banking foyer, New York University professor Austin Campbell stated banking executives concern they are going to be “harmed” by the rise of yield-bearing stablecoins.