JPMorgan rises to stablecoin challenge with roll out of deposit token
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The US banking giant has told CNBC that it's planning to launch a so-called deposit token on Coinbase's public blockchain Base, which is built on top of the Ethereum network. Each deposit token is meant to serve as a digital representation of a commercial bank deposit.
The new yield-bearing token will offer round-the-clock settlement and will only be available to the bank's commercial client base.
'We see institutions using JPMD for onchain digital asset settlement solutions as well as for making cross-border business-to-business transactions,' Naveen Mallela, global co-head of Kinexys, JPMorgan's blockchain unit, told CNBC. 'Given the fact that deposit tokens would eventually be interest bearing as well, this would provide better fungibility with existing deposit products that institutions currently use.'
The bank says that while its token may share some similarities with a stablecoin, it's ultimately a different kind of product, providing institutions with a similar product that also has the benefit of closer ties to the banking system.
In May, the Wall Street Journal reported that PMorgan Chase, Bank of America, Citigroup, and Wells Fargo have held discussions on potentially launching a stablecoin that will improve transaction speeds whilst managing competition from encroaching crypto firms.
The move follows US regulatory action towards stablecoin regulation, with the Senate pushing for the Guiding and Establishing National Innovation for Stablecoin Act (GENIUS Act).
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