Financial giant launches innovative deposit products, exploring new forms of digital payments

Recently, a well-known financial institution announced that it will pilot the launch of a deposit token called JPMD, deployed on a certain public blockchain. The institution plans to transfer a certain amount of JPMD from its digital wallet to a large cryptocurrency exchange in the coming days.

Initially, this deposit token was only open for use by institutional clients of the organization. After obtaining regulatory approval, the user base will be gradually expanded and more supported currencies will be added.

Details of the Deposit Token Pilot Program

The deposit token was not launched hastily. As early as last year, the financial institution began researching the feasibility of deposit tokens. The day before the official announcement of the pilot program, it was revealed that the institution had applied for the "JPMD" trademark, covering functions such as cryptocurrency trading, payments, and custody.

The global co-head of the blockchain department at the institution stated that JPMD will be priced in USD, with issuance and transfers taking place on the public blockchain. In the future, institutional clients of partner exchanges will be able to use this deposit token for trading. He added that the pilot is expected to last several months and will gradually expand after obtaining regulatory approval.

"From an institutional perspective, deposit tokens are superior to stablecoins. Because they are based on a fractional reserve banking system, we believe they are more scalable." The executive pointed out that in the future, JPMD may have interest-bearing functions and could incorporate deposit insurance, which are features currently not available in mainstream stablecoins.

Although JPMD will run on a public chain, it will still be a permissioned token, available only for institutional clients of the organization.

The Difference Between Deposit Tokens and Stablecoins

Deposit tokens are transferable tokens issued on the blockchain by licensed deposit institutions, representing the holder's claim to deposits with the issuing institution. They naturally belong to the banking system and are subject to existing banking regulatory frameworks.

In contrast, stablecoins are tokens pegged to fiat currencies, typically backed on a 1:1 basis by a basket of securities (such as government bonds or other highly liquid assets).

Deposit tokens can support a variety of application scenarios, with functions equivalent to those of current commercial bank currencies, including domestic and international payments, transactions and settlements, and providing cash collateral. Their token form can also realize new functions, such as programmability and instant, atomic settlements, thereby accelerating transaction speeds and automatically executing complex payment operations.

Industry Trends and Regulatory Developments

Recently, the U.S. Senate passed the "GENIUS Act," aimed at establishing a regulatory framework for stablecoins and digital assets. The bill was approved with 68 votes in favor and 30 against, and it will be sent to the House of Representatives for review. The bill requires stablecoins to have a one-to-one reserve, and to establish consumer protection and anti-money laundering mechanisms.

At the same time, several financial institutions in Europe and Asia are actively exploring blockchain payment technology. Some industry insiders believe that Europe may be lagging behind the United States and Asia in this field.

Overall, the launch of JPMD marks the acceleration of traditional financial institutions exploring the future form of on-chain payments. As blockchain technology gradually integrates into mainstream financial systems, deposit tokens issued by commercial banks, protected by regulatory frameworks, and connected to existing account systems may become the new standard of "on-chain cash" in a new phase.