The largest US bank, JP Morgan Chase, has embarked on a new path in the virtual asset market. It is introducing a 'Deposit Token' called JPMD with functions similar to stablecoins, fully diving into digital financial innovation.
According to CNBC on the 17th (local time), JP Morgan announced plans to launch a digital token JPMD based on Coinbase's public blockchain 'Base'. Base is a layer 2 blockchain built on the Ethereum network.
JPMD is a form of converting commercial bank deposits into digital assets. JP Morgan described it as a "digital version of traditional bank deposits". The deposit token is designed with 24-hour payment capabilities and a structure that can provide interest to users.
However, JPMD differs from stablecoins available to the general public. It operates on a permissioned structure and is only provided to JP Morgan's institutional clients, not accessible to everyone on an open blockchain.
JP Morgan explained that the deposit token is a compromise that can maintain the regulation and stability of the existing banking system while utilizing the mobility and speed of digital assets, revealing why they chose deposit tokens over stablecoins.
Stablecoins are typically digital assets pegged to the value of fiat currencies like the US dollar, with Tether (USDT) and Circle (USDC) being prime examples. The global stablecoin market currently stands at around $262 billion and has become a core infrastructure in DeFi, international remittances, and payments.
The launch of JPMD is interpreted as JP Morgan's attempt to complement the limitations of the existing banking system through blockchain technology. Particularly, attention is focused on what role deposit tokens can play in improving inter-institutional payment efficiency and liquidity.
