JP Morgan Creates Own Dollar-Pegged Crypto for Cross-Border Transfers
JP Morgan, one of the largest banks in the world, which manages $2.7 trillion in assets, created and prepared for testing own cryptocurrency JPM Coin. The price of the new token will be pegged to the US dollar, and the coin will be used to transfer money within the bank.
JP Morgan hopes to speed up settlements within the bank with the help of a new cryptocurrency. The bank began developing cryptocurrency a year ago. Head of the digital department and blockchain JP Morgan Umar Farouk told Bloomberg that testing will begin in the coming months, and several institutional clients will get access to the new coin.
JP Morgan is the first major US bank to publicly announce the development of own cryptocurrency. Every day JP Morgan process internal payments worth $5 trillion. So the use of cryptocurrency, even only for bank customers will be able to make a set the tone on the cryptocurrency market.
The new coin will be pegged to the US dollar. It means that the cost of a one JPM Coin token will be set at $1. In addition, unlike other cryptocurrencies, JP Morgan built his token on a private blockchain.
Previously, several analysts at JP Morgan have argued there was a bubble in the cryptocurrency market, and it burst. Due to this, the crypto industry has received a chance for stable development, which may attract institutional investors. Another bank report stated that the blockchain has great potential and can help financial institutions save money. But in the next 3-5 years, a breakthrough is not to be expected.