JPM Coin: J.P. Morgan’s Endeavor in Blockchain

  • Does the development of JPM Coin have any impact on the Interbank Information Network (IIN), JPMorgan’s new blockchain network?
  • How does JPM Coin work?
  • Is JPM Coin a cryptocurrency or stablecoin?

The Interbank Information Network (IIN)

IIN serves to address the cross-border payment issues in all major markets including Americas, Asia, Europe, Middle East, and Africa. Launched as a pilot in October 2017, IIN was developed to reduce the cross-border payment delay, and fight back against the threat of emerging non-bank competitors (such as TransferWise). Currently, the total amount monthly payments handled by TransferWise is more than three billion euros.

Connotation of IIN

The interbank network refers to the connection between interbank financial institutions (such as commercial banks, securities companies, and insurance companies) based on the needs of liquidity management and risk diversification. There are two types of interbank networks: directly connected networks and indirectly connected networks.

JPM Coin’s Potential Impact on the Interbank Information Network (IIN)

Does the development of JPM Coin have any impact on the Interbank Information Network (IIN), J.P. Morgan’s new blockchain network? To address this issue, it is important to note that IIN transfers information, not payments, between correspondent banks.

About Quorum

Quorum is an enterprise-ready distributed ledger and smart contract platform. Quorum is an enterprise-focused version of Ethereum. Quorum provides private smart contract execution and enterprise grade performance with single blockchain architecture.

How Does JPM Coin Work?

The diagram below is a simple representation of how the process works.

  • In step 1, a J.P. Morgan client commits deposits to a designated account and receives an equivalent number of JPM Coins.
  • In step 2, these JPM Coins are used for transactions over a blockchain network with other J.P. Morgan clients (e.g., money movement, payments in securities transactions).
  • Finally in step 3, holders of JPM Coins redeem them for USD at J.P. Morgan.

Is JPM Coin a Cryptocurrency or Stablecoin?

The wide use of cryptographic techniques by mainstream financial enterprises has four potential effects. The JPM Coin is a token that is issued on J.P. Morgan private blockchain network to the authorized users only. J.P. Morgan has the full control over the JPM Coin. It is not a typical decentralized cryptocurrency that is circulated on the open market. Although the JPM Coin is pegged to USD a 1:1 ratio, it cannot be circulated in the open market. Therefore, it is not a typical stablecoin. Instead, it is only an internal settlement token of J.P. Morgan. It does not introduce the fiat money to the cryptocurrency market, nor will it provide liquidity to the crypto-asset market as USDT does.

Applications of JPM Coin

There are three early applications for the JPM Coin, according to Farooq, head of J.P. Morgan’s blockchain projects

Reference

J.P. Morgan announces ‘JPM Coin,’ A USD-pegged cryptocoin for cross-border payments, security, and more

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Alibaba Cloud

Alibaba Cloud

Follow me to keep abreast with the latest technology news, industry insights, and developer trends. Alibaba Cloud website:https://www.alibabacloud.com