JPMorgan is launching its own cryptocurrency

Photo by Spencer Platt/Getty Images

JPMorgan Chase has thrown its hat into the cryptocurrency ring, proposing to launch its own digital coin, as spotted by CNBC. It’s one of the few banks to consider launching cryptocurrency, and the initiative may be surprising given that CEO Jamie Dimon has said he doesn’t “really give a shit” about bitcoin.

The CEO’s harsh views of bitcoin haven’t stopped his company from going ahead and creating a new digital token called the JPM Coin. It’s supposed to give bankers and corporate clients a way to make payments to each other in real time as part of the company’s substantial corporate payments business.

JPMorgan Chase imagines cryptocurrency transactions could replace wire transfers that generally take several days to complete. It sees a future where giant companies like Facebook could move money around quickly for employee payroll just by shifting around JPM Coin. There’s no mention of an average consumer being able to purchase or use JPM Coin, even further down the line.

It’s not the first measure JPMorgan has taken into investing in cryptocurrency and blockchain. JPMorgan already built an Ethereum-based blockchain platform last year for business customers and proposed using digital tokens backed by diamonds and gold bars on the platform.

JPM Coin will be tied to the US dollar, as a way of making it more financially stable than other cryptocurrencies, which have fluctuated wildly in price over recent years. When you sell off a JPM token, you’re supposed to get one dollar back as an assurance that your money is still real.

The coin will first appear in small quantities in a few months as JPMorgan continues to test the technology. It isn’t clear when it could actually see a public launch, if ever.

Comments

It’s always funny when bankers try to adopt new technology.

If anybody from JPM is reading this – you don’t need cryptocurrency. The benefit of cryptocurrency is anonymity and non-duplicating currency in a trust-less environment. None of these are valuable or applicable in your situation. You’re better off building a straightforward transaction system like PayPal.

"Its sees a future where giant companies like Facebook could move money around quickly for employee payroll just by shifting around JPM Coin."

The purpose of this coin is not anonymity. It’s too allow their customers to more quickly move money. Unlikely the bank would institute this if their corporate customers did not have any interest in it

Because employees LOVE getting paid in funny crypto money rather than US dollars. You know what they say? "Gee, I really hate it when my money gets deposited in a bank every few weeks. What I really need is an extra step to convert it into US dollars that I was getting anyway. Oh and an extra step to do during taxes because technically I may have some capital gains/losses due to minor fluctuations. Fun!!!"

SMH

the users will still receive use – this is about avoiding some of the payment clearing systems. I.e. CHIPS and ACH and SWIFT which can be painfully slow and cumbersome and open to fraud

I think there is some real context missing in the verge reporting here.

I’m sure the people who created this know a whole lot more about cryptocurrencies than you do. They don’t need some random bitcoin fan to tell them what it can and can’t do lol

Bankers adopt new technology all the time. Besides porn, the financial industry is one of the biggest technological early adopters, because any advantage is worth money.

"random bitcoin fan"

LOL. I think I stumbled into some weird crypto war, and I’m not even going to try.

Yeah you are right. I am sure you know more about whether cryptocurrency is applicable for a major multinational bank than all of the bankers, economists, and analysts who have researched this for years.

Logical fallacy – appealing to authority. All the economists, analysts and bankers in the world let 2008 happen. They’re far from infallible. Got a real argument?

Oh, and while we’re there, JPM’s CEO agrees with me, so…

That’s not a logical fallacy to say an entire bank system that has spent years researching a tool might know more about it’s use than an anonymous nobody on the internet. Also the JP Morgan’s CEO was referring to bitcoin, a speculative virtually currency that has lost 64 percent of it’s value in a year. This crypto is pegged to the value of the dollar and is not meant for speculation but rather as a means of transferring funds.

Here’s a real argument, you have no idea what you are talking about. To suggest you know better about the viability of a blockchain technology for a multinational bank than the people who work there is laughable.

He’s not saying he knows better beside majority of of people don’t know how anything works in general. So what’s your point. Cryptocurrency with fiat and is not decentralize is nothing but another paypal. But we all welcome this though. Because as long bitcoin exist you can move money there for anonymous.

To be fair, Zelle already did that but yep.

Wow The Verge sure hit hard on the downsides of Bitcoin but reprints this PR?

What’s the security mechanism? Isn’t one centralized store of value a hacker’s goldmine? How do they intend to make money off of this? Are there mining fees? Does it have built in KYC/AML? Is every node KYC/AML compliant?

All of this to say… how can it be as secure and/or as fast as a massively decentralized open source Bitcoin with Lightning Network? Seems like a slower, more expensive, more hackable, more restricted version of Bitcoin. Congrats u tried silver star.

They can cut Visa [CreditCard Payment systems] out of their customers’ transactions. They will have access to the generated consumer data for "free," and not have to pay-out transaction percentages to card partners from legacy payments systems like Visa.
And of course, they can also play fast & loose a little with the coin supply every once in a while. Maybe the bank could even borrow in chase-coin to be repaid in chase-coin with the chance to inflate their way out of a debt obligation by just altering some parameters and unleashing more coin on the market so a 1,000,000 coin debt can get paid off with a few dollars payment.
(Ok, they would probably only do that as a last resort since it would likely kill their entire operation…but people still keep buying Argentina’s government bonds despite the historic tendency of turning into junk every 10-years)

…what does your response have to do with this supposed "blockchain" technology or with any of my questions? They can do all of that already.

Their security mechanism is this:

https://dealbook.nytimes.com/2008/03/18/jpmorgans-12-billion-bailout/

"Trust us, we’re too big to fail"

My first though was of e-Coin, as in the cryptocurrency from Evil Corp… just finished watching Mr. Robot S3…

The problem is they just don’t get it. The whole point of cryptocurrency is anonymity and avoidance of a central authority. A bank launching their own cryptocurrency is pointless and antithetical. I’m sure this was kickstarted by some large clients not wanting to wait days for ACH or EFT payments.

The only reason these processes take days is because they’re built on a decrepit infrastructure. Other countries have legislation enforcing fast EFTs. The US banks aren’t in the 21st century because they don’t have to be. The idea with JPM Coin is to take the instant-transfer capability of cryptocurrency without doing the smart thing and simply upgrading their aging infrastructure.

Nope. It’s bitcoin fans that just don’t get it. These guys are the one’s that get it. They used the usable technological parts for something useful.

People want one thing from their currency: stability and reliability. They aren’t interested in an unpredictable libertarian dystopian bottle cap currency you make in your own basement because everyone is out to get you.

People just don’t care. That’s what people like you don’t get.

I agree with you; there’s nothing wrong with taking the usable parts from something else and addressing an urgent need. But to pitch it as introducing yet another cryptocurrency is both misleading and foolish. JPM Coin is tied to the dollar by definition and run by a single bank, so it is not a new cryptocurrency. Moreover, most of the world is laughing at cryptocurrency right now, and the only ones who aren’t are the "basement-dwelling dystopians." These are the same people that will have issues with this. For everyone else, a new cryptocurrency of any kind is simply a bad joke and reflects poorly on JPM.

This is just a lazy attempt to patch their ancient systems on the cheap and generate (negative?) buzz, rather than do the right thing and do banking like a 21st century institution and upgrade the ACH network. This is simply JPM being short-sighted, lazy, and late to the party.

Yeah if only the bankers, economists, and analysts and programmers that have spent years researching and developing this cryptocurrency had instead listened to an anonymous nobody on the internet they would have really understood how crypto is applicable to their business and clients.

This really helps to explain why Dimon has been such a crypto basher. He wanted his piece of the pie. If the pie is smaller bigger piece for him.

Just another centralized stable coin. Yawn. Might as well call it an Excel spreadsheet.

All they did was create JPMC "store credit"

It’s basically Amazon.com credit or Xbox points. Or even casino money.

It’s a direct exchange of currency for internal use only.

Cryptocurrency remains our dumbest invention.

Because you believe in devalue in our hard earn money? Hmm that’s weird

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