According to Cointelegraph, financial giant JPMorgan is developing a blockchain-based deposit token for cross-border transactions. The solution, which aims to speed up payments and settlements for corporate clients, is awaiting regulatory approval in the United States.
The deposit token differs from JPMorgan's existing JPM Coin, which allows corporate clients to transfer dollars and euros within the financial institution. The new deposit token will enable transactions with other banks and is suitable for various forms of settlements on a blockchain, including tokenized securities trades.
The deposit token shares some similarities with JPM Coin in terms of compliance, as its transactions will undergo know-your-customer and anti-fraud processes. In 2022, the token was piloted in a single transaction as part of Project Guardian, a cross-industry effort led by the Monetary Authority of Singapore.
JPMorgan has previously expressed support for deposit tokens, stating that they may offer more stability and reliability compared to stablecoins and central bank digital currencies. The bank's deposit token initiative not only expands its blockchain-based solutions but also increases competition for stablecoin issuers. PayPal, for example, recently launched its stablecoin (PYUSD) to facilitate faster settlements.