US bank JP Morgan to test transactions via its own cryptocoin

US bank JP Morgan Chase is going to test its own token JPM Coin. Business customers of the company will have the option of having part of the mutual transactions take place via the token.

This is the first practical use of cryptocurrencies by a major US bank, CNBC claims. The JPM Coin is a so-called stablecoin: to avoid negative volatile and speculative effects, the value is linked to the dollar. A JPM Coin represents the value of a single dollar. Business customers of JP Morgan can exchange dollars for the coins, make quick payments via JP Morgan, after which the bank returns the value in dollars and destroys the tokens.

The tests will start in a few months. The bank then allows a fraction of its daily payment volume to pass through the token. Every day, JP Morgan would move a total of about six billion dollars worldwide. Only international customers approved by the bank are eligible to participate.

The bank used to be disdainful about Bitcoin and, for example, blocked the purchase of Bitcoin by credit card holders. However, JP Morgan previously agreed that blockchains in combination with a controlled digital currency were promising for many applications. The company already tested an Ethereum-based platform last year and joined The Linux Foundation’s Open Ledger Project in 2015.