Major US investment bank JP Morgan is issuing its own cryptocurrency to “transform the payments business,” according to CNBC.
The firm will begin trials over the coming months, with a fraction of their $6 trillion in daily transactions being sent through “JPM Coin,” which will be used to instantly settle payments between clients.
The move by JP Morgan seems to be a massive U-turn considering their CEO Jamie Dimon’s comments in 2017, when he labelled Bitcoin as a “fraud.”
But now it seems as though they are seeing the potential of blockchain technology, with head of JP Morgan’s blockchain projects, Umar Farooq, stating that the applications are “quite frankly endless.”
“So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction,” said Farooq.
“The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.”
JP Morgan is rolling out the first U.S. bank-backed cryptocurrency: The JPM Coin. #CNBCCrypto https://t.co/r5zDsxW9en pic.twitter.com/RqFXQjO6fC
— CNBC (@CNBC) February 14, 2019
Speaking at the World Economic Forum in Davos last month, Jamie Dimon revealed that he “took no satisfaction” in seeing Bitcoin’s price fall 80% from its $20,000 all-time high.
He will certainly be hoping for better performance from his firm’s JPM Coin, which has three early applications including international payments for corporate clients, securities transactions, and allowing huge corporations that use JP Morgan’s treasury services business to replace the dollars they hold in subsidiaries across the world.
“Money sloshes back and forth all over the world in a large enterprise,” Farooq said.
“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.”
He added: “Pretty much every big corporation is our client, and most of the major banks in the world are, too. Even if this was limited to JPM clients at the institutional level, it shouldn’t hold us back.”
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