JPMorgan will make JPM Coin, its token representing dollar deposits at the bank, available to institutional clients on the Ethereum blockchain, according to Bloomberg.
The move represents an expansion of JPMorgan's blockchain efforts beyond Base, the layer-2 network built by Coinbase Global, and its private Kinexys network, which currently processes more than $7 billion in daily transactions.
Why Ethereum
Emma Landriault, head of Kinexys Labs at JPMorgan's blockchain division, said the bank selected Ethereum because of the blockchain's liquidity and existing institutional adoption. Ethereum is already used by institutional clients and offers more liquidity than rival networks, making it attractive for crypto companies seeking blockchain payments and financial firms that need to settle trades or back tokenized assets.
JPMorgan had previously indicated plans to expand JPM Coin beyond Base, flagging a move to the Canton Network in January.
Tokenization Benefits
Tokenization converts real-world and financial assets into digital form recorded and traded on decentralized ledgers. The process enables faster trade settlement and quicker movement of money while reducing delays inherent in traditional payment systems.
The bank has not disclosed when JPM Coin will become available on Ethereum.
Broader Banking Efforts
JPMorgan is among major U.S. banks exploring tokenization. JPMorgan, Citigroup, Bank of America, and Wells Fargo, along with more than a dozen other banks, have plans to launch a shared network for tokenized deposits.
Internationally, JPMorgan is among more than 30 banks assisting Swift, the interbank messaging service, in developing a blockchain-based ledger. In July, Swift announced that 17 banks, including Citigroup and Wells Fargo, were preparing to pilot live transactions on its blockchain platform.
