JPMorgan Chase‘s (JPM) digital currency is in commercial use for the first time, and the bank on Tuesday launched a new business around the technology underpinning the coin. That follows a Bitcoin price surge over this month.
JPM Coin — a cryptocurrency JPMorgan launched last year — “is being used commercially for the first time this week” by a big technology client, which the bank did not identify, CNBC reported on Tuesday. The client is using the cryptocurrency for cross-border payments.
The bank also introduced a new segment devoted to cryptocurrencies and blockchain, the record-keeping technology that enables cryptocurrency transactions. That segment is called Onyx.
JPMorgan hopes blockchain could reduce errors and rejections in cross-border payments by helping banks verify account information and regulatory compliance, CNBC said.
Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, told CNBC he believes the world is “shifting to a period of commercialization” of blockchain and cryptocurrency.
The advance for the bank’s cryptocurrency follows years of theorizing over the potential for bitcoin and blockchain. Blockchain records transactions and other data on a shared ledger that allows participants to agree on the information’s accuracy.
Analysts have said blockchain, as a result, has the potential to eliminate middlemen and remake everything from payments to ride-hailing to identifying theft and counterfeits. Bitcoin prices have sailed through peaks and valleys over the years, however, as hype built but failed to materialize.
JPMorgan Stock, Bitcoin Price
Bitcoin rose 5% to $13,670 on Tuesday. The advance for the digital coin put it at levels not seen since early 2018.
Cryptocurrency prices jumped last week after PayPal (PYPL) announced the launch of a service that would allow users to buy and sell cryptocurrency from their PayPal accounts. That followed similar move from fintech rival Square (SQ) earlier.
“The migration toward digital payments and digital representations of value continues to accelerate, driven by the Covid-19 pandemic and the increased interest in digital currencies from central banks and consumers,” PayPal said in a statement last week.
“Mainstream adoption of cryptocurrencies has traditionally been hindered by their limited utility as an instrument of exchange due to volatility, cost and speed to transact,” the statement continued.
Tackling Paper Checks, Central Banks
As part of the Onyx launch, JPMorgan has also changed the name of its blockchain-based Interbank Information Network to Liink. The Interbank Information Network, intended to speed up global payments, launched as a pilot in 2017. The network consists of more than 400 banks and corporations worldwide.
The bank also hopes blockchain could facilitate paper-check processing. JPMorgan is also looking into creating payment rails for central banks looking into creating their own digital currencies, CNBC said.
The bank, while more receptive to blockchain, was not always so receptive to cryptocurrency. CEO Jamie Dimon in 2017 called Bitcoin a “fraud.”
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