JP Morgan Chase introduces first US bank cryptocurrency
JP Morgan Chase is the first major US bank to have its own cryptocurrency.
JP Morgan Chase is creating its own cryptocurrency. The bank is the first large bank in the US to have its own digital payment system.
Why does JP Morgan have its own cryptocurrency?
JP Morgan has introduced its ‘JPM Coin’ that customers can use and is redeemable for one US dollar.The bank insists that the crypto’s value won’t fluctuate like bitcoin. The financial institution explained its move into blockchain technology in a statement.
‘We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators,’ said JP Morgan.
The financial institution wants to move into blockchain to find a faster way to transfer money. Umar Farooq, head of JP Morgan’s blockchain projects, explained why the bank will handle cryptocurrency transactions.
‘So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction. The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this,’ said Farooq.
How will JP Morgan cryptocurrency be used?
Farooq noted that the crypto will be used in three ways. The first would be for large corporate customers to cut back on slow-paced wire transfers. The second purpose is for securities. The third method would be for major corporations like Facebook to manage activities like paying employees.
‘Money sloshes back and forth all over the world in a large enterprise. Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it,’ said Farooq.
JP Morgan Chase hopes that its cryptocurrency will help make it easier for customers to transfer money in a more modern way. One of the oldest US banks is moving into the future of finance with the newest financial technology.
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