In a landmark move that could redefine institutional crypto adoption, JPMorgan Chase—the largest U.S. bank by assets—has launched a pilot for its new JPMD deposit token on Coinbase’s Base blockchain, an Ethereum Layer 2 network. Unlike retail-focused stablecoins, JPMD is a permissioned token exclusively for institutional clients, enabling near-instant, low-cost settlements and cross-border transactions 24/7.
The announcement comes just days after the U.S. Senate passed the GENIUS Act, a regulatory framework for stablecoins, signaling a potential shift in how traditional finance interacts with blockchain technology. With JPMorgan’s entry, the lines between banking and crypto are blurring faster than ever.
While stablecoins like USDT and USDC dominate retail crypto trading, JPMorgan’s JPMD is tailored for corporations, asset managers, and pension funds. Unlike stablecoins, which are issued by crypto firms and backed by reserve assets, JPMD represents a direct claim on JPMorgan’s balance sheet, offering institutional clients regulatory certainty and seamless integration with existing banking systems.
Naveen Mallela, global co-head of JPMorgan’s blockchain unit Kinexys, explained:
“Institutional clients can treat JPMD as bank deposits on their balance sheet, providing clarity around financial and accounting treatment. This isn’t just about payments—it’s about enabling on-chain settlements for tokenized assets and cross-border transactions at scale.”
JPMorgan’s decision to deploy JPMD on Base, rather than a fully permissionless chain, reflects a cautious yet forward-looking approach. Base, an Ethereum Layer 2 solution, offers:
Sub-second, sub-cent transactions—critical for high-volume institutional flows.
Partial decentralization with oversight—a compromise between public blockchain openness and banking compliance.
Existing partnership with Coinbase, a long-standing JPMorgan client and a leader in crypto infrastructure.
Jesse Pollak, creator of Base, emphasized:
“Base provides the speed and cost efficiency institutions need, while maintaining the security and regulatory alignment JPMorgan requires.”
JPMorgan’s move could disrupt the $262 billion stablecoin market, dominated by Tether (USDT) and Circle (USDC). Unlike these retail-focused tokens, JPMD is designed for wholesale financial operations, including:
Tokenized securities settlements (e.g., BlackRock’s BUIDL and Franklin Templeton’s BENJI).
Cross-border B2B payments, eliminating traditional banking delays.
Collateral management, where instant liquidity is crucial for derivatives and margin trading.
Analysts suggest that if other major banks follow suit, deposit tokens could become the preferred on-chain cash instrument for institutions, sidelining non-bank stablecoins in high-value transactions.
The timing aligns with the GENIUS Act, which aims to bring stablecoins under federal oversight. While JPMD isn’t a stablecoin, its launch signals that banks are ready to embrace blockchain—but on their own terms.
Rohit Chopra, former CFPB director, recently advocated for bank-issued tokenized deposits as a more regulated alternative to stablecoins. JPMorgan’s pilot may accelerate this trend, with Bank of America, Citi, and Wells Fargo reportedly exploring similar initiatives.
The pilot has already attracted interest from large asset managers and corporate treasuries, though JPMorgan has not disclosed specific participants. The bank plans to expand JPMD’s use cases in the coming months, potentially integrating it with:
Tokenized treasury products (e.g., money market funds).
Private blockchain interoperability, bridging JPMorgan’s existing Onyx Digital Assets network with public chains.
One uncertainty remains: Basel Committee regulations, which impose strict capital requirements on banks using permissionless blockchains. JPMorgan’s choice of Base—a semi-permissioned chain—could be a workaround, but full-scale adoption may require regulatory adjustments.
JPMorgan’s JPMD launch marks a pivotal step in bridging traditional finance with decentralized networks. By leveraging Base’s efficiency while maintaining banking safeguards, the bank is positioning itself at the forefront of institutional on-chain finance.
As Brett McLain, Kraken’s head of payments, noted:
“Every major bank is now looking at stablecoins or deposit tokens. JPMorgan just got there first.”
Will JPMD set a new standard for institutional crypto? Share your thoughts on our X.
Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.
CoinDesk – JPMorgan Introduces USD Deposit Token on Coinbase’s Base Blockchain
Fortune – JPMorgan Chase partners with Coinbase to launch deposit token for institutional clients
Ledger Insights – JP Morgan to launch JPMD deposit token on public blockchain Base
PYMNTS – JPMorgan’s New Deposit Token Shows Banks Are Reconsidering Institutional Ledgers
CNBC – JPMorgan moves further into crypto with stablecoin-like deposit token
Banking Dive – JPMorgan Chase to launch deposit token
Base.org – Official Base Blockchain Overview
