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(Kitco News) - Cryptocurrency developments at the institutional level continue to unfold as JPMorgan has introduced euro-denominated payments for corporate clients using its native, blockchain-powered digital currency, JPM Coin
According to a report from Bloomberg, JPM Coin went live for euro transactions on Wednesday, with Germany’s Siemens AG conducting the first euro payment on the platform. A Siemens representative has since confirmed the cross-border transaction.
JPMorgan is one of the few large banking institutions that has found a way to put blockchain technology to use in a commercial setting, but it still remains a small part of their overall operations.
Up to this point, JPM Coin has been used to process roughly $300 billion worth of transactions since its launch. This pales in comparison to the nearly $10 trillion in payments that the bank process on a daily basis, showing that a large-scale use for blockchain remains elusive.
One possible reason for the limited adoption is the fact that JPM Coin is only being used for wholesale payments, which are only accessible to institutional clients.
Large multinational organizations can use the system to transfer dollars or euros to and from their various JPMorgan accounts around the world or make blockchain payments to other customers of the bank instead of using traditional payment rails.
The major benefit of JPM Coin payments is that they operate 24/7 and are not limited to business hours like traditional transactions. This helps reduce processing time so that client transactions are executed more quickly.
Basak Toprak, JPMorgan’s head of Coin Systems for Europe, the Middle East and Africa, said that corporate treasurers can use the system to better manage liquidity, giving the example of a firm initiating a payment just before it is due.
“There are cost benefits to paying at the right time,” Toprak said. “This could mean they could earn more interest income on their deposits.”
JPM Coin, which originally launched in 2019, is now part of JPMorgan’s blockchain-based Onyx Coin Systems, which was launched in 2020. The purpose of the system is to improve the quality of wholesale payment transactions. As of April 2023, the bank has reportedly processed nearly $700 billion in short-term loan transactions via Onyx.
While JPMorgan CEO Jamie Dimon is a well-known and boisterous critic of cryptocurrencies, the bank is decidedly bullish on blockchain technology and has gotten involved in numerous projects around the world in recent years.
In October, the bank partnered with Visa to develop a streamlined cross-border payment system through the use of their private blockchain networks Liink and B2B Connect.
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The next month, the United States Patent and Trademark Office (USPTO) approved the bank's trademark application for the “J.P. MORGAN WALLET,” which is designed to transfer and exchange virtual currencies, conduct crypto payment processing, and provide virtual checking accounts and general financial services.
Amid the uptick in regulatory actions against crypto firms in the U.S., JPMorgan announced that it was planning to open a crypto innovation lab in Athens, Greece, to foster development in blockchain technology, artificial intelligence (AI) and cryptography. According to Tryone Lobbam, head of JPMorgan's DeFi platform Onyx, the innovation lab will have an initial focus on building blockchain-related capabilities in support of Onyx.
And in early June, JPMorgan partnered with six major Indian banks to launch a pilot program designed to test a blockchain-based platform for the settlement of interbank dollar transactions. The goal of the new blockchain project is to expand the capacity of the existing settlement system and the platform will allow the banks to process instant transactions 24 hours a day, seven days a week.
