JPMorgan Chase Launches JPMD Deposit Token: Challenging the Stablecoin Market

JPMorgan Chase recently announced a pilot launch of a deposit Token named JPMD, deployed on the Base blockchain. This move marks the bank's expansion of the application range of digital asset products beyond its internal systems. Initially, JPMD will only be available to JPMorgan Chase's institutional clients, and in the future, it will gradually expand its user base and supported coins after obtaining regulatory approval.

The global co-head of Kinexys's blockchain department stated that from an institutional perspective, deposit tokens are superior to stablecoins. He pointed out that JPMD may have interest-bearing features in the future and is expected to be included in deposit insurance, which are characteristics currently not possessed by mainstream stablecoins.

JPMorgan believes that deposit tokens, as a new form of digital currency, will be widely used in the digital asset ecosystem. They represent a claim on deposits at commercial banks and are essentially a digital version of customer account deposits. Unlike stablecoins, deposit tokens are issued on the blockchain by licensed deposit-taking institutions and naturally belong to the banking system, being subject to existing banking regulatory frameworks.

Previously, the bank had been operating the Kinexys Digital Payments network, supporting corporate clients in transferring US dollars, euros, and British pounds. The network's transaction volume increased tenfold last year, currently processing over $2 billion in transactions daily.

It is worth noting that a senior executive at JPMorgan recently expressed caution about the "overcrowded" stablecoin market during a conference. She believes that the market is at the peak of a stablecoin boom, and the evolution of the market landscape in the coming years is worth watching.

At the same time, the U.S. Senate has just passed the GENIUS Act, which aims to establish a regulatory framework for stablecoins and digital assets. The advancement of this bill, along with the listing plans of certain digital currency companies, has contributed to a new wave of stablecoin enthusiasm.

Overall, the launch of JPMD reflects that traditional financial institutions are accelerating their exploration of the future form of on-chain payments. As blockchain technology gradually integrates into mainstream financial systems, deposit tokens issued by commercial banks, regulated and connected to existing account systems, could become the standard for a new phase of "on-chain cash." Currently, several multinational financial and technology companies are also attempting to utilize blockchain technology to achieve more efficient and cost-effective payment settlement services.