In recent weeks, JPMorgan revealed plans to introduce its cryptocurrency JPM Coin to select corporate clients in a pilot program by the end of the year.
Umar Farooq, head of the investment bank’s digital treasury services and blockchain group, has stated that his company intends to move forward with introducing JPM Coin to selected clients “around the end of the year” pending regulatory approval.
The decision to introduce the pilot program now was spurred by increased interest from the bank’s global customers about the possible benefits of JPM Coin. Farooq indicated that JPMorgan clients in the United States, Japan and Europe have shown interest in learning more about JPM Coin’s capabilities in improving transaction speed. However, Farooq would not name specific clients who are slated to be involved in the pilot program.
Farooq said that the goal of the customer trials of his firm’s new technology is to speed up financial transactions, including bond transactions and payments between firms.
The United States’ largest bank first revealed its foray into crypto back in February. JPM Coin is built on top of Quorum, a private internally-developed version of Ethereum.
JPM Coin is intended to function as a stablecoin. Users can deposit fiat cash at the bank to exchange for the token; the token can then be transferred via a permissioned distributed ledger. The end recipient can ultimately convert the token back to cash with JPMorgan.
While JPM Coin will be linked to the U.S. dollar initially, the bank plans to expand to other fiat currencies over time.
Speaking with Bloomberg, Farooq indicated that JPM Coin does have some hurdles gaining regulatory approval as it continues its development for a broader client base: “The technology is very good, but it takes time in terms of licensing and approval. It must be explained.”
Looking beyond JPM Coin, Farooq and JPMorgan also see a future in tokenized and digital securities. Farooq told Bloomberg that the bank predicts that a number of stocks will go digital within the next five to 20 years. Overall, Farooq is highly optimistic about the potential of blockchain technology, stating that the possible applications are “frankly quite endless.”