JPMorgan Chase officially launches JPM Coin deposit token, a traditional financial giant accelerating its embrace of blockchain.

On November 12, JPMorgan Chase officially launched the JPM Coin deposit token for institutional clients. This token represents clients’ USD deposits at the bank and enables 24/7 real-time payment settlement via the Base public blockchain. The release followed months of testing involving well-known institutions such as Mastercard and B2C2.

Naveen Mallela, Co-Head of Kinexys, JPMorgan’s blockchain division, revealed that the bank plans to open services to client customers after regulatory approval and expand to other currencies like the euro. Currently, JPMorgan’s existing blockchain network, Kinexys Digital Payments, processes approximately $3 billion daily, compared to the traditional payments division’s daily volume of $100 trillion.

Technical Architecture and Operating Model of JPM Coin

According to Bloomberg, JPM Coin employs a two-layer architecture: the base layer is built on Ethereum Layer 2 network Base, leveraging its high throughput and low transaction costs for payment instructions; the upper layer integrates with JPMorgan’s core banking system to ensure a 1:1 peg between deposits and tokens. This design allows institutional clients to transfer funds on the blockchain in real-time while enjoying the insurance protection of traditional bank deposits. Unlike the earlier JPM Coin limited to internal networks, this launch marks the first time JPM Coin is connected to a public blockchain, representing a significant breakthrough in the bank’s openness to blockchain applications.

Operationally, clients first open a deposit account at JPMorgan, then convert deposits into JPM Coin tokens via authorized interfaces. These tokens can be freely transferred among participants on the Base network, and recipients can redeem them for traditional USD deposits at any time. Mallela emphasized that JPM Coin will be accepted as collateral by Coinbase, providing a new liquidity management tool for crypto trading firms. Testing data shows that transaction confirmation time has been reduced from 2-3 days in traditional cross-border payments to 3-5 seconds, with costs decreased by approximately 70%.

Differentiation Between Deposit Tokens and Stablecoins

Deposit tokens differ fundamentally from traditional stablecoins in both technical implementation and business models. Deposit tokens are issued by regulated commercial banks, directly representing clients’ deposit claims at the bank—essentially a digital extension of the existing banking system. Stablecoins, on the other hand, are typically issued by non-bank entities, maintaining a peg through high-liquidity assets like U.S. Treasuries. Issuers profit from reserve asset yields, but these earnings are rarely passed on to token holders.

Naveen Mallela pointed out, “Stablecoins have garnered significant attention, but for institutional clients, deposit products offer a more attractive alternative—they can generate returns.” This feature is especially important for crypto trading firms holding large balances, as they need the convenience of stablecoins for payments while also earning interest on deposits. Currently, institutions like BNY Mellon and HSBC are exploring or have launched similar services, forming a collective response from traditional banks against stablecoin issuers.

JPM Coin Core Parameters and Market Positioning

Technical Parameters

• Underlying Blockchain: Base (Ethereum Layer 2)
• Transaction Speed: 3-5 seconds finality
• Operating Hours: 24/7
• Collateral Acceptance: Coinbase platform

Business Scale

• Test Participants: Mastercard, Coinbase, B2C2
• Existing Network Daily Volume: $3 billion
• Traditional Payment Daily Volume: $100 trillion
• Expansion Plans: Trademark registered for euro version (JPME)

The Wave of Blockchain Adoption in Traditional Finance

JPMorgan’s initiative exemplifies the broader trend of traditional finance embracing blockchain technology. Citibank is testing blockchain-based cross-border payment networks, Santander has launched digital asset custody services for enterprises, and Deutsche Bank is exploring securities tokenization issuance. This wave is driven by multiple factors: maturation of enterprise-grade blockchain technology, increasing client demand for real-time settlement, and regulatory frameworks like the U.S. “Genius Act” providing oversight for stablecoins.

Payment giants like PayPal are also actively involved. Last year, PayPal launched its USD stablecoin, which has processed over $20 billion in transactions, and is now exploring collaboration opportunities with banks like JPMorgan. Industry experts believe 2025 will be the “Year of Institutional Blockchain Applications,” with blockchain-based settlement networks potentially handling 15% of global cross-border payments within the next 18 months, a significant increase from less than 1% today.

Investment Opportunities and Market Impact Analysis

The deep involvement of traditional financial institutions in crypto markets signals structural changes. First, establishing compliant channels may attract more conservative capital; Morgan Stanley estimates that $2 trillion of traditional funds could enter the digital asset space via tokenization over the next three years. Second, institutional adoption of public chains like Base could enhance their infrastructure status, benefiting related ecosystem tokens.

Investors should focus on three main sectors: blockchain middleware developers (e.g., Chainlink for cross-chain services), compliant custody solutions (e.g., Fireblocks and Copper), and institutional trading platforms (e.g., EDX Markets). Regarding tokens, besides Bitcoin and Ethereum, enterprise-focused chains like Avalanche and Polygon may benefit due to their solid foundation for institutional adoption. A core-satellite investment strategy is recommended: allocate 60% to Bitcoin and Ethereum, 20% to infrastructure projects, 10% to high-performance public chains, and keep 10% in stablecoins.

Conclusion

The launch of JPM Coin by JPMorgan Chase is more than just a product release; it marks a key milestone in the integration of traditional finance with the crypto economy. When systemically important banks begin using public blockchains for core operations, blockchain technology transitions from fringe innovation to mainstream finance. This shift offers increased compliance and liquidity for the crypto market while injecting new efficiency and innovation into traditional finance, ultimately reshaping the future landscape of global payments.