The $4 trillion financial institution is piloting “deposit tokens” on Coinbase’s Ethereum Layer 2 blockchain, Base.
JPMorgan Chase, the largest bank in the United States by assets under management (AUM), with $3.8 trillion as of 2024, according to S&P Global, is testing its own dollar-pegged asset, dubbed a “deposit token,” on Coinbase’s Ethereum Layer 2, Base.
Bloomberg reported on Tuesday afternoon that JPMorgan is piloting “a token called JPMD that represents dollar deposits at the world’s biggest bank, as financial institutions deepen their push into the digital asset sector.” The move comes just two days after the institution filed a trademark application for digital asset services.
JPMorgan has also published its deposit token whitepaper, touting the design as “the key to a safer tokenized economy.”
Deposit tokens are transferable tokens issued on a blockchain but backed by a licensed depository institution with evidence of a deposit that can be claimed against the issuer.
This mechanism offers a stablecoin and CBDC alternative that is backed by deposit insurance, similar to traditional bank deposits. Through deposit tokens, individuals and institutions can settle payments on the blockchain with commercial bank-backed assets, potentially ushering in a new era of safety and sustainability for onchain payments.
JPMorgan also published a piece in the Financial Times, explaining that 97% of institutional investors think tokenization is poised to revolutionize modern finance, and that “the agility of blockchain technology combined with the commercial bank money will transform the future of financial services.”
