JP Morgan is set to launch its own cryptocurrency in an unexpected step for a major US bank.
The bank is scheduled to trial its JPM Coin in the coming months. It will handle a tiny fraction of the $6 trillion (£4.7 trillion) in payments that the bank moves around globally every day.
The currency will be a digital token that is created by engineers at the New York bank to instantly settle payments between clients.
Umar Farooq, the Head of the blockchain projects of JP Morgan, stated: “Anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction.”
He added: “The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this.”
The news is expected to raise eyebrows among the followers of Jamie Dimon, the boss of JP Morgan who has repeatedly slammed bitcoin, the first cryptocurrency in existence, in the past.
Dimon was reported as stating: “I don’t give a sh*t about Bitcoin,” by CNBC in October, and he has also called the leading cryptocurrency a “fraud” before later retracting the statement.”
In 2015, he noted: “There will be no real, non-controlled currency in the world. There is no government that’s going to put up with it for long.
He added: “There will be no currency that gets around government controls.”
However, in a blog post, JP Morgan stated: “We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated.”
It added: “The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional accounts.”
Unlike bitcoin and most of the other cryptocurrencies that exist across the globe, JPM Coin will be tethered to the value of the US dollar.
The bank explained: “When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time.”