JPMorgan, one of the leading banking institutions, is making waves in the world of cryptocurrency by piloting a US dollar-backed permissioned deposit token on the Ethereum (ETH) layer-2 scaling solution provided by Coinbase, a prominent American crypto exchange.
According to a statement released by Coinbase, JPMorgan is set to launch a token called JMPD on Base, which is Coinbase’s blockchain business unit known as Kinexys. This token is backed 1:1 by deposits and denominated in USD, combining the benefits of on-chain finance programmability with the trust and compliance required by regulated financial institutions.
The primary goal behind the launch of JMPD is to leverage global on-chain payment rails. By joining forces with Coinbase’s crypto-as-a-service platform, JPMorgan aims to cater to over 200 banks, brokers, fintech companies, and payment providers utilizing the exchange’s digital asset offerings.
In the long run, JPMorgan plans to enable its institutional clients to seamlessly and securely transfer funds on-chain at any given time, all while incurring only a fraction of a cent in fees. It’s important to note that JPMD is exclusively designed for institutional clients and is not accessible to retail or individual consumers.
Additionally, Base has expanded its support to include wrapped versions of Cardano (ADA) and Litecoin (LTC). Coinbase has confirmed that it holds 1:1 reserves of the assets backing cbADA and cbLTC, which are ERC-20 tokens backed by ADA and LTC held in custody by Coinbase.
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As the financial landscape continues to evolve, JPMorgan’s venture into the realm of cryptocurrency with the launch of JMPD on Coinbase’s Base platform signifies a significant step towards embracing the potential of blockchain technology in traditional finance.
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