JPMorgan Chase’s foray into the blockchain ecosystem continues, the financial institution choosing the basic network to control its newly launched token, JPMD.
The pilot program has been confirmed by Naveen Malleala, a JPMorgan Blockchain division, Kinexys, who told Bloomberg that a fixed quantity of JPMD token will be transferred to Crypto Exchange Coinbase in the coming days.
The transfer will be facilitated by the blockchain of layer 2 of Coinbase, base, which was launched in 2023 and currently holds the largest market share among Ethereum Layer-2S, according to Coingecko.
Mallela said the transaction will be denominated in US dollars, with additional currencies supported after obtaining regulatory approval.
At the end of the pilot phase, which should extend over several months, Coinbase institutional customers will have access to JPMD for transactions, according to Mallela.
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The deposit tokens are “superior” to the stablescoins
The pilot tests were announced a few days after JPMorgan filed a brand request for JPMD, which described a range of crypto -related services, including trading in digital assets, transfers and payments.
The deposit tokens, in particular, represent deposits in dollars held in customer bank accounts. Unlike stablescoins – digital representations of fiduciary currencies supported by cash and cash equivalents – deposit tokens work in the traditional banking frame.
“From an institutional point of view, deposit tokens are a higher alternative to stablecoins,” said Malélla in Bloomberg, noting that their fractional reserve support makes them more evolving.
The executive noted that JPMD could potentially pay interest in the future, distinguishing it from most stablescoins, which generally do not generate return.
However, the stablecoins provided by the yield can gain momentum over time, some initiates of the industry suggest that the powerful American banking lobby “panic” on their potential to disrupt traditional financial models.
According to sources close to the banking lobby, Professor of New York University, Austin Campbell, said that banking leaders feared being “injured” by the rise of stable -to -yield stables.
