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JPMorgan launches the first cryptocurrency for a major U.S. bank

The American entity thus becomes the first bank to make a strong bet on digital currencies. It will have a restricted use to transactions between large investors, excluding individuals.

The US bank JPMorgan Chase announced the launch of its own cryptocurrency, JPM Coin. Which will be indexed on the dollar with a restricted use to transactions between large investors, excluding individuals.

The first major bank to make a strong bet on digital currencies

Thus, JPMorgan Chasese becomes the first major bank to make a strong bet on digital currencies. The other firms, such as Goldman Sachs, were content to serve as intermediaries to financial product investors based on decriptomed fluctuations such as bitcoin.

The decision comes at a time when bitcoin, the mother of cryptocurrencies, lost 80% of its value since reaching its peak in December 2017.

Based on the blockchain system, the JPM Coin will be used to make instant transfers between institutional investors, such as large companies, hedge-funds, investment funds, pension funds, says Umar Farooq, a blockchain referent at JPMorgan.

“The JPM coin is not properly a currency,” says the leader. “It’s a digital currency that represents US dollars in the specific accounts in JPMorgan Chase. In short, a JPM Coin will always have the value equivalent to one US dollar.”

JPM coins of an equivalent value of US Dollar

This means that the value of the cryptocurrency will always be associated with that of the greenback.

“When a client sends money to another client via blockchain, the JPM coins are instantly transferred and exchanged for their equivalent in US dollars, decreasing the time of the traditional regulations”, adds the person in charge.

Broadly speaking, a client of JPMorgan Chase deposits money in a specific account of the bank and in return receives JPM coins of an equivalent value. Then you can make virtual transactions with other bank customers such as payments, transfers or stock operations.

These operations are added to a large transparent and unforgeable purchasing register, the blockchain system. The client can then convert his JPM coins into dollars.

In principle JPM coin may only be exchanged for dollars, but the institution expects to include other currencies.

The cryptocurrency is currently a prototype, but JPMorgan expects to start producing it in the coming days and test it with a small number of institutional clients.


Also published on Medium.

Published inCryptocurrencies

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