The Bitcoin price has a long history of responding to changes in the banking industry. A recent development on September 8th suggests that JPMorgan, a prominent financial institution, is preparing to make a significant impact on digital finance. According to a recent Bloomberg report, the bank is on the verge of completing a groundbreaking blockchain-based deposit token, pending approval from U.S. regulators.
Finally Blockchain in Banking: A New Start!
In contrast to stablecoins issued by non-bank entities, JPMorgan’s new token will be introduced by a traditional depository institution. This token will complement JPM Coin, which is currently limited to transactions within the bank itself. However, the new token will enable transactions not only within JPMorgan but also with other financial institutions, particularly for settlements involving tokenized securities.
Done and Dusted!
Following a successful pilot project with the Monetary Authority of Singapore last year, this breakthrough demonstrates substantial progress. The token, like JPM Coin, will enforce strict compliance, including thorough customer verification and anti-fraud measures. JPMorgan’s foray into blockchain-based deposit tokens is a significant milestone, not just for the bank, but for the wider financial industry. Subject to regulatory approval, this innovation stands to revolutionize cross-border transactions.
“The past few years have been a tipping point for institutional DeFi, where even the largest banks are adopting this technology,” said Monica Long, President of Ripple.
JP Morgan’s new system alongside the existing XRP payment system has raised questions. Some believe it may be impacted by regulatory issues, allowing the SEC to allow new crypto players while retaining Ripple.
Crypto to Get A Boost
Historically, crises in the banking sector have had a positive impact on most cryptocurrencies. These crises tend to bolster confidence in digital assets, as investors explore stablecoins as alternative investments. The encouraging news is that institutions like JPMorgan opening the doors to blockchain technology will likely bolster the crypto market. As an example, Bitcoin experienced a surge from $27,000 to over $28,000 on March 19 due to an issue involving Credit Suisse.