JPMorgan Launches Deposit Token, Partners With DBS To Expand Interoperability

• Banking giant JPMorgan recently rolled out the JPM Coin deposit token for institutional clients.
• JPMorgan has partnered with DBS to expand interoperability between the two banks’ deposit tokens.
• The American multinational bank faces a €45 million fine from BaFin due to anti-money laundering compliance issues.

Despite JPMorgan CEO Jamie Dimon’s constant tirades against Bitcoin (BTC) and other cryptocurrencies, the bank has recently launched its own JPM Coin. It also revealed plans to expand its interoperability across multiple blockchains and to achieve interbank compatibility.

This is a developing story as of Wednesday morning (UTC), with only Bloomberg serving as the only direct source for JPMorgan Coin’s supposed launch.

What are JPM Coins?

JP Morgan notably unveiled the JPM Coin in 2019, marking the first time a major bank has started using blockchain technology. Along the way, the company has steadily improved the token’s scalability.

ADVERTISEMENTJPM Coins are digital claims on bank deposits within JPMorgan. They are currently exclusive to institutional clients.

According to JPMorgan, the tokens are transferable between the bank and its direct clients. It can also be transacted between eligible customers.

The tokens operate within Base, an Ethereum (ETH) Layer 2 blockchain developed by Coinbase. It was a continuation of Kinexys’ efforts to accelerate digital money solutions under the “Digital Payments Blockchain Deposit Accounts” initiative.

ADVERTISEMENT## DBS Partners with Kynexis by JPMorgan

Like most tokenized deposit token initiatives from various banks, JPMorgan Coin is siloed within the confines of its issuer’s direct oversight and customers. Hence, JPMorgan’s Kinexys has partnered with Singapore-based DBS to explore the development of an interoperability framework for the deposit token.

DBS stated that the project’s initial phase will center on enabling onchain transfers of tokenized value between DBS and JPMorgan. From there, they plan to gradually explore the expansion of its interoperability with other blockchain-based banking solutions.

Nonetheless, the move is a significant step forward for both banks, as it could bridge their institutional client bases in Southeast Asia and the United States.

JPMorgan Gets Into Hot Water with BaFin

Back in the West, JPMorgan is embroiled in a regulatory tussle with Germany’s Federal Financial Supervisory Authority (BaFin). Reuters reported that it’s facing the largest-ever fine imposed by the financial watchdog in the tune of €45 million ($52.11 million at prevailing exchange rates).

It can be recalled that Dimon categorically called Bitcoin a “pet rock” that does nothing except help in fraud and money laundering when explaining their bank’s reluctance to offer services related to it before eventually caving in to client demand. Ironically, the issue in Germany stemmed from the bank’s alleged deficiencies in its anti-money laundering measures.

BaFin claimed that JPMorgan had “systematically” filed its suspicious activity reports late between October 2021 and September 2022. The regulator scaled the hefty fine to the institution’s status as a banking giant.

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