One of the biggest American banks, JPMorgan Chase & Co, announced that it developed its own digital coin, JPM Coin, to speed up payments between customers. The statement also said the coin is based on blockchain, that is why improvement is about to come.
Why would the bank create JPM Coin?
JPMorgan explains that clients often faced trouble with the speed of transactions. Sometimes, it takes much longer time to send money than they expected, therefore it is an urgent problem for bank to solve. The head of digital treasury services and blockchain, Umar Farooq, said:
“Many of our clients move money in different ways and they’re looking for a more real-time way to move value around.”
The amount of payments JPMorgan moves every day accounts for more than $5 trillion, thus a number of client demanded to develop digital coin on blockchain to implement instantaneous value transfer. The bank started the development of JPM Coin about a year ago.
Main details of the coin
JP Morgan has become the first American bank to introduce its own digital coin in public. However, it is not a usual cryptocurrency in its true sense.
Ordinary cryptos usually use public blockchain technology that is in open access to everyone. Yet, a JPM Coin uses private blockchain of JPMorgan Chase & Co, and the price of the coin is pegged to one U.S. dollar.
The company said:
“When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalents amount of U.S. dollars, reducing the typical settlement time.”
It is still unclear when the launch of the JPM Coin will be, all we know, there will be a small number of coins in a few months to test the technology.
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