Engineers at J.P. Morgan have created the first digital cryptocurrency to be backed by a national bank in the United States. Named JPM Coin, this digital currency will be provided to clients of J.P. Morgan and will be used to settle payments between wholesalers.
The lender, which moves more than $6 trillion across the globe every single day, has introduced this cryptocurrency to large corporations in a small trial-based test. Clients will be invited to participate, and Morgan’s engineers have promised that the transactions will be flawless, safe, and secure. Because it will be slowly introduced, experts believe that J.P. Morgan will garner the necessary data to quickly scale their business.
Although banks have lashed out against bitcoin and similar digital currencies in the past, J.P. Morgan’s backing suggests that executives believe that the framework is in place to safely convey purchases.
Describing how this may impact the world of banking, Umar Farooq, head of the blockchain project, announced, “So anything that currently exists in the world, as that moves on the blockchain, this would be the payment leg for that transaction. The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”
J.P. Morgan will also test using this cryptocurrency as a means to revolutionize international payments, and engineers have claimed that early tests have shown significant promise. When this product is released, it will mark the first time that the banking industry has tested real-world applications of the blockchain and cryptocurrency.
Although only a small amount of payments will be used with this currency, it represents a massive shift in the bank’s perception towards cryptocurrencies. This trial is the first time in which a significant bank latched on to the idea and pursued a digital token.
Despite not releasing the product to the general public, investors should be excited about the promise that this trial holds. If J.P. Morgan believes that cryptocurrency holds promise, many other companies will soon approve.
With J.P. Morgan becoming the first bank to jump on the cryptocurrency bandwagon, consumers may have wider access to these digital tokens