JPMorgan Chase is getting deeper into blockchain technology, enabling payments on public blockchain networks for institutional clients.

The bank’s “JPMD,” or JPMorgan Dollar, token is a deposit product designed for compatibility with existing financial infrastructure and will be treated like other bank deposits, including potentially being eligible for deposit insurance, Naveen Mallela, global co-head of Kinexys by J.P. Morgan, told Bank Automation News.

Unlike stablecoins, which are generally issued by non-bank entities and backed 1:1 by reserves held in trust, JPMDs are issued by a licensed bank, backed by U.S. dollars and regulated by traditional banking laws, Mallela said. 

“JPMD is not a stablecoin. It is a digital representation of a deposit held at J.P. Morgan and issued on permissioned blockchain rails,” Mallela said. 

While the token can be seen on public blockchain from June 23, the $3.6 trillion bank filed for a trademark for the token on June 15, and JPMD will debut on crypto exchange platform Coinbase’s blockchain network Base, according to Base. 

Kinexys evolution

The JPMD deposit token is a natural evolution of JPMorgan’s digital asset arm, Kinexys, which was launched nearly a decade ago, Mallela said, adding that in 2019, Kinexys introduced Kinexys Digital Payments, which uses Blockchain Deposit Accounts.

The deposit permission deposit token will be only available to JPMorgan’s institutional clients — unlike many stablecoins, which are publicly available. 

“It is intended to offer institutional clients a regulated, bank-issued alternative to stablecoins,” Mallela said. 

The initial focus will be on peer-to-peer transfers between the bank’s institutional clients’ wallets, enabling faster decision-making, operational efficiency and streamlined support for cross-border or digital asset transactions. 

JPMorgan Chase reported $2.4 trillion in deposits in the first quarter, up 2% year over year.