JPMorgan Chase, America’s largest bank, has just released a virtual currency called JPM Coin. According to CNBC, this is the first virtual currency backed by a leading bank in the world’s No. 1 economy.
Every day, the wholesale banking department of JPMorgan Chase moves the amount of money up to 6 trillion USD on a global scale for corporate customers. JPM Coin was launched to make quick payments between JPMorgan Chase customers.
Testing this virtual currency into payments in the wholesale banking segment will be carried out in a few months. Initially, JPM Coin will only take a very small part in the amount of money that JPMorgan Chase moves every day.
The release of the virtual currency is part of JPMorgan Chase’s effort to prepare for the future where many financial-banking operations from cross-border payments to corporate debt issuance, will done based on block chain technology. This is the technology behind digital currencies, the most famous of which is Bitcoin.
When JPMorgan Chase tested using JPM Coin for international payments, this would be the first real-world application of a virtual currency in the banking sector.
Until now, JP Morgan Chase still holds a cautious view on virtual money investment, considering it an investment channel with a high level of risk. Last year, JP Morgan Chase and two other US banks banned the use of credit cards issued by them to buy virtual money.
Also with a cautious view, another big US bank, Goldman Sachs, is said to have shelved plans to open Bitcoin trading.
There are some important differences between JPM Coin and Bitcoin – the virtual currency that CEO Jamie Dimon of JPMorgan Chase once called a “trick” for investors. While skeptical about Bitcoin, Dimon and his subordinates always argue that blockchain technology and regulated digital currencies are promising.
The main difference of JPM Coin is that each virtual currency can be converted into 1 USD, so its value will not fluctuate. JPMorgan Chase customers will be granted JPM Coin after depositing money in JPMorgan Chase. After using the virtual money used for payment, the bank will cancel the virtual money and return it to the customer an amount of equivalent USD.