JPMorgan Launches Digital Deposit Token JPMD on Coinbase’s Base Blockchain

JPMorgan is set to pilot a new digital deposit token, JPMD, on Coinbase’s Base blockchain, marking a significant expansion of the bank’s blockchain footprint beyond its internal systems. The pilot program involves transferring a fixed amount of JPMD, which is backed one-for-one by U.S. dollar deposits, from JPMorgan’s wallet to Coinbase. Initially, the token will be available to institutional clients for transactions, with plans to broaden access and support other currencies pending regulatory approval.

The launch of JPMD represents a notable evolution in JPMorgan’s use of blockchain technology. The bank already operates Kinexys, its in-house platform for digital payments and tokenized assets. Kinexys processes over $2 billion in daily payments and supports tokenized foreign exchange, derivatives, and data validation via its Liink network. The JPMD pilot extends this infrastructure to the public blockchain space for the first time, offering a more secure and scalable solution for institutional use compared to stablecoins.

Deposit tokens, such as JPMD, are issued by regulated banks and represent a direct claim on deposits. This makes them more secure and scalable for institutional use. Naveen Mallela, global co-head of Kinexys, emphasized that deposit tokens are a superior alternative to stablecoins, potentially offering features such as interest-bearing capabilities and deposit insurance coverage in the future. This positions JPMD as a more stable and secure digital asset for institutional clients.

The move follows a series of public blockchain milestones for JPMorgan. In May, the bank completed its first tokenized settlement on a public network, transferring U.S. Treasuries using Chainlink and Ondo Finance. In April, Kinexys partnered with Nacha’s Phixius to use blockchain for U.S. account validation in ACH payments. Most recently, JPMorgan began accepting crypto exchange-traded funds shares, including BlackRock’s iShares Bitcoin Trust, as collateral for client loans. These changes demonstrate the bank’s increasing dedication to integrating traditional finance with blockchain technology.

While JPMD is intended for wider use, starting with Coinbase and potentially branching out to retail-facing applications, Kinexys will continue to focus on large corporate flows. The pilot is expected to run for several months, with further developments depending on regulatory feedback and market demand. This initiative underscores JPMorgan’s commitment to leveraging blockchain technology to enhance transaction speed and efficiency, potentially setting a precedent for other financial institutions to adopt similar solutions.