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JP Morgan rolls out the first American bank-backed crypto competition



There are three early applications for JPM Coin, according to Farooq.

The first is for international payments to large corporate customers, which now typically take place through transfers between financial institutions of decades old networks such as Swift. Instead of taking more than a day to settle because the institutions have interrupted the time for transactions and countries operate on different systems, the payments pay in real time and at any time of the day he said.

The other is for securities transactions. In April, J.P. Morgan issued a blockchain debt issue, creating a virtual $ 150 million deposit for a Canadian bank. Instead of relying on wires to buy the issue ̵

1; resulting in a time between settling the transaction and being paid for it – institutional investors can use the JP Morgan token, resulting in immediate settlements.

The final use would be for large companies using JP Morgan's treasury services business to replace the dollars they have in subsidiaries worldwide. Unused by retail customers, the company handles a significant portion of the world's regulated cash flows for companies from Honeywell International to Facebook, moving dollars to activities such as employee and vendor payments. It generated $ 9 billion in revenue last year for the bank.

"Money goes back and forth all over the world in a big company," Farooq says. "Is there a way to ensure that a subsidiary can represent cash on the balance without actually transferring it to the unit? In this way, they can consolidate their money and probably get better prices for it."

Take a closer look, JPM Coin can be used for payments on internet connected devices if it needs blockchain captures, says Farooq.

JP Morgan asks that its first mover status and high market share in corporate payments – it banks 80 percent of the Fortune 500 companies – give its technology a good chance of being adopted even though other banks create their own coins.

"Just about every big company is our client, and most of the largest banks in the world are too," says Farooq. "Even though this was limited to JPM clients at institutional level, it shouldn't hold us back."

– With reporting of
CNBCs Kate Rooney


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