JP Morgan goes live with its first blockchain transaction for European corporate clients using its own token.
The JPM Coin transaction is carried out by Siemens AG, the large conglomerate based in Germany, in a Euro-denominated payment on the JP Morgan permissioned blockchain. A bank executive said Bloomberg that this is the first Euro-denominated JPM Coin transaction.
A permissioned blockchain is a distributed ledger that is not publicly accessible. The bank says that JPM Coin can only be used by institutional clients, and only for settling payments.
Banks and other TradFi companies are exploring ways to use blockchain technologies as part of their business. For them, conducting transactions on a blockchain is a potential way to facilitate settlement in a secure manner.
JP Morgan launched it first Coin Services division in 2019. It allows transfers between different client accounts to take place 24/7 using the blockchain instead of traditional payment channels, such as wire transfers. Instead of being confined to business hours, ledger transactions can take place at any day or time.
Although it is four years old, transactions made using JPM Coin add up to about $300 billion. According to JP Morgan, it processes about $9.8 trillion in daily payments.
Moreover, JP Morgan’s clients are not the only ones using crypto to trade.
On Thursday, German software giant SAP announced it was using Circle’s US Dollar Coin (USDC) to test cross-border payments. SAP, the largest non-American software company by revenue, says it will speed up the pace of SMEs trying to send money abroad.
USDC is a stablecoin, a cryptocurrency pegged to a stable asset, which in this case is the US dollar. The company says customers can now receive USDC as “play money” to test the payment option. These tests run from a separate blockchain than Ethereum, and they don’t involve real ERC-20 dollar tokens—yet.
Crypto companies rely on the blockchain to process payments and transfers of digital assets, and so do banks serving the sector. Before it was closed, it was based in New York Signature Bank operates Signet which facilitates conversions from crypto to traditional fiat currency.