FinTech

CNBC: JPMorgan to launch first bank-backed cryptocurrency

JPM Coin will be used to settle transactions in the megabank’s wholesale payments business

JPMorgan Chase is rolling out the first cryptocurrency backed by a U.S. financial institution, according to a new report by CNBC.

CNBC’s Hugh Son reports that JPM Coin will be a digital token used to settle transactions between clients of the bank’s wholesale payments business.

The bank hasn’t officially rolled out the coin for use just yet. The report notes that the bank will begin to trial the coin's use in the next few months and will only be used for a “tiny fraction” of the payments made in its wholesale business.

From the article:

For some, J.P. Morgan's new currency may come as an unexpected development for a technology that rose from the wreckage of the financial crisis and was supposed to disrupt the established banking world.

When the international payments are tested, it will be one of the first real-world applications for a cryptocurrency in banking. The industry has mostly shunned the asset class as too risky. Last year, J.P. Morgan and two other lenders banned the purchase of bitcoins by credit card customers. And Goldman Sachs reportedly shelved plans to create a bitcoin trading desk after exploring the idea.

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