JPMorgan puts its deposit token on Ethereum, taking Wall Street dollars onto a public chain

JPMorgan, the largest US bank per CoinDesk, has put JPM Coin on the Ethereum mainnet. The token, which represents dollar deposits held at the bank, became available to institutional clients on Monday, October 19, according to an emailed statement from the bank reported by CoinDesk. Bloomberg reported the expansion first.

JPM Coin was first issued about a year ago on Base, the Ethereum layer-2 network built by Coinbase. In January JPMorgan said it also planned to bring the token to the Canton Network. Emma Landriault, head of Kinexys Labs at Kinexys, the bank's blockchain division, told Bloomberg the bank picked Ethereum because the chain has more liquidity than rival networks and is already used by institutional clients, CoinDesk reported. "We've clearly been in a year of further convergence between Wall Street and crypto," she said, per PYMNTS.

The bank expects two kinds of users: crypto-industry clients that want blockchain payments, and financial institutions that need digital cash to settle trades or back tokenized assets. Crypto assets worth almost $50 billion are locked in Ethereum-based applications, CoinDesk reported, citing DeFiLlama.

A deposit token represents commercial-bank money and remains a liability of the issuing bank, whereas a stablecoin typically represents a claim structured separately from a bank deposit, PYMNTS noted. JPMorgan, Citi, Bank of America, Wells Fargo and more than a dozen other banks are planning a shared network for tokenized deposits, CoinDesk has reported. What to watch next is whether other large banks follow JPMorgan onto public chains, and when the Canton launch arrives.