JPMorgan Launches JPMD Token on Coinbase Base Blockchain for Institutional Payments

JPMorgan Chase is set to launch a pilot program for a new dollar-backed digital deposit token, marking a significant step in bringing traditional banking infrastructure onto public blockchains. The trial, planned to start in the days ahead, will be held on Coinbase’s Base blockchain and will invite a mix of institutional users. The new coin, to be referred to as JPMD, will have a direct claim over deposits held at JPMorgan, making it different from stablecoins that are secured with other external reserves such as U.S. Treasuries.

As a pilot, a predetermined quantity of JPMD will be moved out of JPMorgan's digital wallet to Coinbase. The token will then be used by institutional clients of Coinbase as the means of on-chain payments and settlements. Compared to typical stablecoins, including USDC or USDT, JPMD will exist in the current fractional-reserve banking system. This implies that the token holders will have the opportunity to earn interests and exposure to deposit insurance, which is uncharacteristic of conventional crypto stablecoins.

Mallela characterized deposit tokens as an example of a better solution to institutions; the reason being that it fits well into the regular financial systems and other banking regulations. Noting that JPMorgan has internal research suggesting that more than 90% of the current circulating money is already in commercial bank accounts, he explained, they are commercial bank money, and they are on the verge of becoming the dominant form of digital value.

Base, Coinbase’s Ethereum Layer 2 blockchain, confirmed the partnership on June 17. In a statement, the platform highlighted the token’s groundbreaking nature: “It will be the first token of its kind on a public blockchain, enabling fast, secure, 24/7 money movement between trusted parties. Moving money should take seconds, not days. Commercial banking is coming on-chain.”

The activity is paired with a trademark filing on June 16 of JPMorgan, which registered the name JPMD, including digital trading, payment services, custody, and transfers of tokens in real-time, indicating that there is long-term strategic design to the project. This pilot should take several months and only a few institutional members can participate. As long as regulatory approval goes through and the pilot is successful, JPMorgan will reach more client segments and enter multi-currency deposit tokens. This would also establish JPMD as a major tool of cross-border settlements and on-chain liquidity handling.

The initiative is in line with the overall digital payments effort of JPMorgan. Its Kinexys Digital Payments Network, which was initially referred to as JPM Coin, already clears more than 2 billion dollars a day in institutional accounts. This initiative of JPMorgan is a part of a broader institutional trend of blockchain experimentation as legislators seek to establish regulations around the use of stablecoins. Recently, financial giants such as Bank of America and DTCC have stepped up blockchain pilots with U.S. legislators urging stablecoin regulations to address reserve coverage and auditable transparency.

The JPMD pilot launch of JPMorgan is a sign of a paradigm shift towards blending the conventional banking with the blockchain infrastructure. The token may become one of the landmarks of digital settlement as regulatory detail is clarified and institutional demand increases. As it gains broader adoption, JPMD could revolutionize the way money in a decentralized, 24/7 financial ecosystem works, even in commercial banks.