JPMorgan’s JPM Coin to Enter Ethereum Ecosystem in Latest Tokenization Move

JPMorgan is set to expand its JPM Coin dollar deposit token to Ethereum, a move aimed at making the bank’s blockchain-based payment and settlement services available to a broader range of institutional clients, Bloomberg reported.

The planned expansion would extend JPM Coin beyond Base, the layer-2 network developed by Coinbase Global (COIN). The token was introduced nearly a year ago as part of JPMorgan’s efforts to bring traditional banking services onto blockchain infrastructure.

Ethereum’s deeper liquidity and established institutional adoption were important considerations in the decision, Emma Landriault, head of Kinexys Labs at JPMorgan’s blockchain division Kinexys, told Bloomberg.

The bank indicated in January that it wanted to deploy JPM Coin beyond Base, with the Canton Network also identified as a potential destination. Wider availability could help crypto companies conduct blockchain-based payments and allow financial institutions to use digital deposit tokens for trade settlement and to support tokenized assets, Landriault said.

JPMorgan has not confirmed when the Ethereum deployment will go live. Landriault did not provide a launch date, and the bank had not responded to CoinDesk’s request for comment before publication.

Tokenization converts assets and financial instruments into digital representations recorded on a distributed ledger. By using this technology, financial institutions aim to speed up settlement, transfer funds more efficiently and reduce the delays associated with conventional payment systems.

Despite increasing interest in tokenized finance, banks have largely focused on private blockchain networks. In the United States, JPMorgan, Citi (C), Bank of America (BAC), Wells Fargo (WFC) and more than a dozen other lenders are planning a shared platform for tokenized deposits.

JPMorgan’s Kinexys private blockchain already processes more than $7 billion in daily transactions, compared with roughly $12 trillion handled each day by the bank’s overall payments business. Meanwhile, DeFiLlama data indicates that Ethereum-based applications hold nearly $50 billion in crypto assets.

Beyond its own blockchain initiatives, JPMorgan is involved in efforts to develop shared infrastructure for international payments. The bank is among more than 30 lenders working with Swift, the interbank messaging service, to establish the specifications and governance for a blockchain-based ledger.

Swift announced in July that 17 banks, including Citi and Wells Fargo, were preparing to test live transactions on the proposed system. JPMorgan was not included in the list of institutions named for that pilot.