JP Morgan Chase could start testing its JPM Coin by the end of this year, Bloomberg has reported.
The US banking giant unveiled its plan to launch its own stablecoin pegged to the US dollar in February. While the bank’s chief executive officer Jamie Dimon said around that time that JPM Coin could one day become a consumer product, the company indicated that its initial plan was for the coin to be used for business-to-business services, such as settlement of transactions between corporate clients and the company.
In a recent interview with Bloomberg in Tokyo, JPMorgan’s head of digital treasury services and blockchain Umar Farooq said that the token could enable “instant” delivery of bonds on a blockchain platform.
“We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized,” Farooq said, as quoted by Bloomberg.
The executive also talked about how JPM Coin could speed up bond transaction to allow traders to instantly deliver the securities in exchange for cash. The idea is that buyers would be able to use the JPM tokens in their accounts to buy tokenised bonds, with computer programs handling the transaction.
This procedure could lead to significant time savings. Currently, it usually takes two days for a seller of Japanese government bonds to deliver them to the buyer in exchange for cash, according to Shuichi Ohsaki, chief rates strategist at Bank of America Merrill Lynch in Tokyo.
The US bank would likely commence pilot testing of its token around the end of the year, although this would be contingent on regulatory approvals. The pilots will likely be conducted with a few clients to see how the tokens can speed up transactions between them.
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