JPMorgan is offering euro settlements between wholesale clients through its JPM Coin payment rail.
The new service will settle payments 24/7 using JPMorgan’s private blockchain introduced in 2019 to quickly settle dollar transactions between institutional clients.
JPM Coin Settles Institutional Payments 24/7 on Blockchain Payment Rails
The new euro-denominated JPM Coin settlements will add to the $300 billion that JPMorgan has so far settled on its private network.
Among other advantages, the exchange of tokenized funds allows firms’ financial departments to pay service providers just before they need it. Doing so helps them earn more interest since funds stay in company accounts longer.
Blockchain payment rails came into focus after crypto-friendly bank Silvergate filed for voluntary liquidation earlier this year.
The company’s Silvergate Exchange Network allowed crypto traders to buy and sell crypto through an exchange holding a Silvergate account.
Ripple’s XRP ledger has proven an important vehicle for remittances. Bitcoin Lightning company Strike sends funds instantly over a payment channel between two nodes on Bitcoin’s Lightning layer.
Goldman Sachs launched its blockchain payment rails in December 2022 and helped the European Investment Bank launch a digital bond.
TradFi Banks Use Tokenized Assets Rather Than Private Chains
Deutsche Bank AG said this week it filed for permission to be a digital asset custodian amid regulatory uncertainty. Real-world asset tokenization offers traditional finance users entry into decentralized finance (DeFi) and blockchain.
Tokenized real estate, cars, and bank deposits can be collateral on DeFi protocols.
JPMorgan carried out a DeFi trade with Singapore’s DBS Bank and SBI Digital Assets Holdings last year to exchange US dollars for the Japanese yen.
The project encoded verifiable credentials in smart contracts that granted authorized traders access to a permissioned pool. The fiat currencies were tokenized.
A company strategist recently said Ethereum might need a new regulator since it is neither a security nor a commodity.
JPMorgan’s CEO Jamie Dimon as dismissed Bitcoin as having no value, while the bank’s peers mostly struggled to justify building and scaling large networks.
Despite investments of $380 million and $234 million in cryptocurrency technologies, Standard Chartered and Morgan Stanley have not launched private networks.
Citigroup revived its mothballed crypto ambitions with a revived interest in trading and custody in 2021. It canned its Citicoin project in 2019.
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