JP Morgan to Start JPM Coin Trial, Considering to Tokenize Bonds

JP Morgan Chase is considering to start the trial of its much anticipated JPM Coin with its corporate customers, according to a Bloomberg Japan report.

Tuesday’s report detailed that the bank is seeing interest from clients from the United States, Europe, and Japan for the introduction of its digital currency for speeding up bond transactions and intercompany remittances.

“We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized,” Umar Farooq, JP Morgan’s head of digital treasury services and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term, told Bloomberg.

However, according to Farooq, there are many hurdles in the path of blockchain technology in terms of licensing and approvals.

“The technology is very good, but it takes time in terms of licensing and approval. It must be explained,” Farooq added.

Blockchain in a centralized environment

JP Morgan announced its digital currency in February with an aim to use it to settle transactions of its corporate clients, increasing settlement efficiency. The currency is pegged to fiat to avoid any fluctuations in its value. The use of the currency is also limited within the bank's ecosystem as it cannot be traded in the secondary markets.

The Wall Street giant is also investing heavily on blockchain technology and has developed a private decentralized network, called Quorum, based on Ethereum Ethereum Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Read this Term. It is also trying to capture the interbank market and on-boarded more than 200 banks on its Interbank Information Network (IIN).

Wall Street is driving assets to Ethereum

Microsoft is driving developers to Ethereum JP Morgan is driving banks to Ethereum Open Finance is driving value to Ethereum And soon, Facebook will drive users to Ethereum Seems like everyone is working for Ethereum these days — Ryan Sean Adams (@RyanSAdams) June 25, 2019

According to Farooq, the bank needs some regulatory approvals before initiating the pilot transactions.

The US bank has also partnered with Microsoft to handle the technical difficulties faced by its blockchain customers.

“We are a bank, and technical support for customers using quorum is not a core task,” Farooq added.