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JP Morgan Launches Own Cryptocurrency JPM Coin

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US investment bank JP Morgan announced the launch of its own cryptocurrency JPM Coin, becoming the first US bank to do so. The digital coin, issued on Quorum Blockchain, is designed to make immediate payments using blockchain technology between institutional accounts.

According to the lender, the JPM Coin is not money per se. It is a digital coin representing U.S. Dollars held in designated accounts at JPMorgan Chase N.A. and always has a value equivalent to one U.S. dollar. JPMorgan Chase N.A, with a $2.6 trillion balance sheet, will redeem each JPM Coin in fiat currency.

When money is transferred over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.

JPM Coin is currently a prototype, and the bank, which has a Blockchain Center of Excellence, successfully tested the movement of money with a small number of institutional clients. It has plans to expand the pilot program later this year.

JPM Coin is currently designed for business-to-business money movement flows, and as of now, there are no plans to make this available to individuals.

The bank noted that the coin will extended to other major currencies over time.

JP Morgan expects the coin to yield significant benefits for blockchain applications by reducing clients' counterparty and settlement risk. It also decreases capital requirements and enabling instant value transfer.

Umar Farooq, head of Digital Treasury Services and Blockchain, said, "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."

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