It's been a long time coming — but it still feels surprising.
New York-based investment bank JP Morgan Chase is launching the first-ever major cryptocurrency backed by a U.S. bank. The digital token, dubbed "JPM Coin," will be used to "instantly settle payments between clients," CNBC reports.
The announcement comes as a substantial change of tune for JP Morgan Chase. Its CEO Jamie Dimon famously called Bitcoin a "fraud" in 2017 before changing his mind the following year.
The new token will initially run on top of JP Morgan Chase's Quorom platform, its own take on popular blockchain platform Ethereum, according to Coindesk.
Each JPM Coin will be worth a single U.S. dollar, like other so-called stablecoins. JP Morgan Chase clients will deposit their fiat currency in exchange for JPM Coins, and after settling the transaction, the coins will be returned in the form of U.S. dollars.
Wire transfer systems, including networks like Swift, are clunky — they can take long periods to complete and verify, especially when making payments internationally.
Blockchain technology has the potential, according to JP Morgan Chase, to speed things up considerably.
"The first bullet in any war is always the most important, and it looks like this could be the first move in a broader adoption of blockchain and digital currencies by large institutions," London hedge fund Prime Factor Capital co-founder Adam Grimsley told Bloomberg.
But not everybody is convinced that it's as groundbreaking as JP Morgan Chase wants us to think. Technology reporter for the New York Times Nathaniel Popper argued it might be "less useful, because it can't move anywhere beyond the walls of JPMorgan," in a tweet.
Editor's note: This post originally misspelled the name of the CEO of JP Morgan Chase. It has been updated.
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