JPMorgan Chase’s digital token, JPM Coin, is currently processing $1 billion in transactions daily, and the financial giant is planning on making the currency more widely available.
Bloomberg, which first reported on this, recently sat down with Takis Georgakopoulos, JPMorgan’s Global Head of Payments.
“What we do with JPM Coin is the institutional side of that solution,” Georgakopoulos said in the interview with Bloomberg TV. “Working in a permissioned environment with companies that are trusted and trust each other so that way they can move money within their ecosystem 24 by seven.”
Georgakopoulos went on to discuss three major inefficiencies that exist within the payments space. The first one being speed and the fact that there is a delay in making payments, particularly when it comes to making cross-border payments. Secondly, money and information tend to move separately, making it difficult to track and reconcile. Finally, he pointed out that money is fungible, whereas activities are not—and the JPM Coin is a solution to these problems.
“The fact that they’re processing $10 trillion in payments daily is larger than I thought,” said Joel Hugentobler, Analyst for Cryptocurrency at Javelin Strategy & Research. “The JPM coin looks to solve 3 existing issues in payments: speed (or the lack thereof), challenges of money & associated information moving separately, and fungibility.”
“His statements on a retail version and making “tokenized” commercial deposits using the JPM coin type of instrument confirms our stance on the digital asset industry and particularly that stablecoins are going to play a big role in all of this. His comments about 24/7 efficiency, low-to-zero cost with near instant settlement, and programmability features are all areas which we have been talking about at Javelin in which we see this bigger transition taking place -using distributed ledger technology or blockchains – sooner rather than later.”
“More companies are starting to realize the benefits of the available products offered in the digital asset industry. A higher rate environment is likely an additional driver for a surge in recent activity as companies are looking for ways to cut costs and increase revenues while continuing to innovate.”
Are Stablecoins the Answer to Crypto?
Cryptocurrencies have weathered plenty of storms since they were first introduced in 2009 with the launch of Bitcoin. Since then, not much has changed with its inherent volatility, high energy consumption, and its use for criminal operations. While JPMorgan is seeing much success, there are still organizations that are on the fence about launching their own digital currency.
Stablecoins have grown in popularity for being the antithesis of crypto. As their name implies, stablecoins are a type of cryptocurrency that is tied to another asset, which contributes to its stability. Stablecoins have more stability since fiat currencies are less likely to face the extreme volatility that crypto faces.
In his report, Building a Better Stablecoin, Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, delves into defining what stablecoins are, their solid use cases, and what issuers can do to build a better stablecoin.
Although regulators are also keeping an eye on stablecoins and looking to enforce consumer protection, the future of stablecoins as an alternative digital asset looks promising when it comes to transacting with digital assets.
FAQs
JPMorgan Chase's digital token, JPM Coin, is currently processing $1 billion in transactions daily, and the financial giant is planning on making the currency more widely available.
What is the biggest challenge JPMorgan Chase is currently facing? ›
JPMorgan Chase faces a series of challenges as it looks ahead to 2025. Concerns about net interest income, rising expenses, and the trading environment pose significant risks to the bank's financial performance.
What is the JPM digital currency? ›
JPM Coin is intended to serve as a value token on the Quorum consortium blockchain, using software (called "Quorum") also built by JPMorgan Chase, and is used to facilitate interbank payments on the Interbank Information Network (IIN).
What happens if JPMorgan Chase fails? ›
In most cases, the FDIC will try to find another banking institution to acquire the failed bank. If that happens, customers' accounts will simply transfer over to the new bank. You will get information about the transition, and you will likely get new debit cards and checks (if applicable).
Is the US coming out with a digital currency? ›
Is the US Going to Digital Dollar? As of June 2024, the US Federal Reserve has not decided to transition to a CBDC or supplement its existing monetary system with one. It is researching the effects a CBDC would have on the dollar, the US, and the global economy.
What happens if the US dollar goes digital? ›
Challenges with digital dollar status
The technology would, therefore, eliminate anonymous or under-the-table transactions. While this could help deter tax evaders, it also has the potential to give the government unprecedented visibility into American citizens' everyday purchases.
Is my money safe in JPMorgan Chase? ›
SEC Rules and Regulations provide customer protection
JPMS maintains such securities in its possession or in a location that has the controls required by the SEC to protect such securities from claims of third parties, in conformity with the SEC rules.
Is JPMorgan in danger? ›
JPMorgan Chase's odds of distress is less than 3% at the moment. It is unlikely to undergo any financial crunch in the next 24 months. JPMorgan Chase's Odds of distress is determined by interpolating and adjusting JPMorgan Altman Z Score to account for off-balance-sheet items and missing or unfiled public information.
What is the biggest threat to JPMorgan? ›
Cybersecurity Risks: Like many financial institutions, JPMorgan faces significant cybersecurity risks. The company's 10-Q filing highlights the potential for operational disruptions due to cyberattacks or other unauthorized attempts to access the company's information or disrupt its systems.
What banks are switching to digital currency? ›
The pilot will test how banks using digital dollar tokens in a common database can speed up payments. Participating banks include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo.
Central Bank Digital Currency (CBDC) is a new form of money that exists only in digital form. Instead of printing money, the central bank issues widely accessible digital coins so that digital transactions and transfers become simple. Efforts towards CBDC grow all over the world for many reasons.
What will the digital dollar be called? ›
A CBDC is a digital form of central bank money that is widely available to the general public.
Is Chase going under? ›
The Probability of Bankruptcy of JPMorgan Chase & Co (JPM) is 3.8% . This number represents the probability that JPMorgan will face financial distress in the next 24 months given its current fundamentals and market conditions.
What happens to my money if my bank collapses? ›
If your bank closes, you should receive notification of what will happen to your money from the FDIC or NCUA, the acquiring bank or both. You'll automatically have an account at the new bank, or the FDIC or NCUA will issue you a payment returning your funds.
Which banks are in danger of failing? ›
The banks of greatest concern are Flagstar Bank and Zion Bancorporation, according to the screener. Flagstar Bank reported $113 billion in assets with a total CRE of $51 billion. The bank, however, only had $9.3 billion in total equity, making its total CRE exposure 553% of its total equity.
Will Chase Bank convert currency? ›
Chase Bank: Chase customers may exchange currency at local branches. You'll have to call your nearest branch to learn about transaction fees.
Which banks are going to digital currency? ›
The pilot will test how banks using digital dollar tokens in a common database can speed up payments. Participating banks include BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank and Wells Fargo.
Will digital currency replace cash? ›
This type of money is known as a central bank digital currency (CBDC). It would not replace cash.
Are credit unions going to digital currency? ›
Credit unions oppose CBDC
A recent letter noted that the organization “is concerned that the costly trade-offs are very likely to exceed hypothesized benefits of a CBDC,” presumably referring to the impact of a digital dollar on the banking and credit union sectors.
