BACK

Breaking News

J.P. Morgan Chase becomes first major U.S. bank to launch its own cryptocurrency

Summary

J.P. Morgan Chase is the first major U.S. bank to adopt cryptocurrency. It will test the program on its institutional clients.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

J.P. Morgan Chase has become the first major U.S. bank to roll out its own cryptocurrency.

The bank announced on Feb. 14 it will trial-run its digital token, JPM Coin, which will enable clients to settle payments immediately.

When Chase begins testing these international payments, it will mark one of the banking world’s first forays into using cryptocurrency.

Previously, the banking industry has viewed this asset class as too speculative, and as recently as 2018, Chase banned its credit card customers from buying bitcoin.

Chase’s bitcoin-skeptic CEO is bullish on blockchain, cryptocurrency

Although Chase CEO Jamie Dimon has publicly slammed bitcoin, he’s hopeful regarding the usage of blockchain and other regulated digital currencies.

Retailers, however, might never get to use JPM Coin – only the bank’s institutional clients, which have gone through regulatory checks, can currently use it.

How it works

The technology is simple: A client will send someone money over the blockchain, and JPM coins “are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars.” This process will reduce the average settlement time, which can currently take more than a day.

Each JPM Coin equals one U.S. dollar, and clients can use the coin to make payments or buy securities on the blockchain. Once the transaction is complete, Chase destroys the coins.

J.P. Morgan plans to extend its coin to other major currencies going forward.

See related: Blockchain could spur credit card rewards revolution

JPM Coin’s applications

Umar Farooq, head of digital treasury services and blockchain at J.P. Morgan, told CNBC the JPM Coin will feature three early applications.

One will execute the bank’s heavy-hitter corporate clients’ international payments in real time. Until now, the bank has used wire transfers – which sometimes take more than one day to settle due to transaction cut-off times – to handle these payments.

Another will be earmarked for instant securities transactions settlements. The third will serve corporations that employ the bank’s treasury services business to substitute their global subsidiaries’ dollars, a business that made Chase $9 billion in 2018.

“Money sloshes back and forth all over the world in a large enterprise,” Farooq said. “Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it.”

The future

Farooq said clients might be able to use the JPM Coin for payments on internet-connected devices if blockchain gains traction in that arena.

J.P Morgan is also banking on this move to get other banks adopting cryptocurrency.

“Pretty much every big corporation is our client, and most of the major banks in the world are, too,” Farooq said. “Even if this was limited to JPM clients at the institutional level, it shouldn’t hold us back.”

What’s up next?

In Breaking News

Your company-issued card was canceled? Here’s how to protect your credit

If you had a business credit card issued by your employer that was suddenly canceled, there are steps you can take to make sure it doesn't hurt your credit. Here's what to do.

Published: February 11, 2019

See more stories
Credit Card Rate Report Updated: May 23rd, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.