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JPM Coin gains popularity
Innovation is a funny thing. It often arrives with excess hype, then turns into disappointment, before re-emerging in full bloom. A good example is that of JPMorgan Chase: “JPM part”, a corporate stablecoin launched shortly after the 2017 crypto bubble that seemed doomed to languish as a proof of concept that would never make its way into the real world.
However, in recent weeks, the story around JPM Coin changed dramatically when the bank announced that it was exceeding daily trading volumes. 1 billion dollars and that its large corporate clients are finally exploiting the coin’s promise of providing “programmable” money.
If you’re not familiar with JPM Coin, it’s a digital dollar that the bank created on a private version of the Ethereum blockchain. This means that customers with access to the coin (or similar coins) can enjoy the benefits of crypto technology, including 24/7 transactions and smart contracts, in a secure enterprise environment. Well, that’s how it’s supposed to work in theory.
In reality, the last six years have seen a series of announcements involving banks and companies claiming to have completed a blockchain transaction – involving dollars, stocks or commodities – and that’s it. Even if the transactions took place, they don’t really matter since they are mostly one-off events that don’t result in any changes in daily trading.
However, this has quietly started to change, as companies have moved beyond the PR phase of blockchain and started to exploit its real benefits. I spoke with Naveen Mallela, head of parts systems (yes, that’s a title) at JPMorgan Chases’ Onyx, and he explained that companies like Siemens, Cargill, and FedEx all use these tools in their daily operations.
Mallela told me that customers view JPM Coin less as a stablecoin and more as a tool for managing commercial deposits and taking advantage of programmable money. I prodded him on this, asking him what exactly he means by programmable. He explained that this means creating automated instructions for the funds you control. A primitive illustration is automatic bill payment but, thanks to blockchain, businesses can now carry out much more sophisticated operations.
Mallela gave three compelling examples of programmable money in action: companies using blockchain to conduct cash transactions that once happened once a day, but can now happen at any time; financial companies using smart contracts to monitor and respond to margin calls on securities; and companies that arrange for shipping payments to be released at different stages of a journey.
By relying on smart contracts to manage these operations, businesses can more efficiently deploy their liquidity and personnel resources. And this is probably just the beginning. Mallela notes that IFTTT (“if this, then that”) instructions are becoming commonplace in the enterprise blockchain environment and that companies will find more and more ways to use them.
Meanwhile, programmable money is also making an appearance in the investment industry: JPMorgan Chase and Apollo just launched tokenized funds in Singapore, while a startup called Superstate, founded by the creator of the popular DeFi protocol Compound , just raised $14 million do the same in the United States All of this shows that while blockchain-based finance is still far from mainstream, it has quietly taken a giant step forward.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
Binance is launching a new crypto exchange in Thailand alongside Gulf Energy, a giant conglomerate led by the country’s second-richest man. (Bloomberg)
Paxos launches a new USD-pegged stablecoin in Singapore after becoming the second company to secure a key approval from the country’s Monetary Authority. (The block)
THE SECOND carried over to two others Crypto ETF applications, including Shades of grey is proposing to launch one for ETH futures, although many predict approvals in January. (Bloomberg)
Cathie Wood from Ark plugged in Solana on television, helping to drive the price of the altcoin to three times what it was in January. (CNBC)
Bitcoin rose 6%, erasing losses from earlier in the week and bringing the currency back to just under $38,000. (Coin Office)
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