# JPMorgan Launches JPMD "Deposit Token" Pilot: Claims Superiority Over Stablecoins, Targets Institutional Users

By [Isabellan](https://paragraph.com/@-isabellan) · 2025-06-19

jpmorgan

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JPMorgan Chase has initiated a pilot for its **JPMD deposit token**, deployed on **Coinbase-backed Base blockchain**, with potential interest-bearing features in future phases. This move follows years of research—JPMorgan's blockchain unit **Kinexys** began exploring deposit tokens as early as 2023.

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### 🔹 **JPMD Pilot: Key Details**

On June 18, JPMorgan announced the pilot launch of **JPMD**, a deposit token hosted on **Base blockchain**. The bank will soon transfer an initial amount of JPMD from its digital wallet to **Coinbase**, the largest U.S. crypto exchange.

*   **Initial Phase**: Exclusive to JPMorgan’s institutional clients.
    
*   **Future Expansion**: Broader user access and multi-currency support pending U.S. regulatory approval.
    

The pilot will run for **several months**, with potential upgrades like **interest accrual** later.

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### 🔹 **Why Deposit Tokens? JPMorgan’s Strategic Shift**

JPMorgan deliberately avoided entering the **"overcrowded" stablecoin market**, opting instead for a **regulated deposit token model**.

**Naveen Mallela**, Global Co-Head of **Kinexys**, explained to _Bloomberg_:

*   JPMD transactions will occur on **Base**, denominated in USD.
    
*   The token leverages **fractional-reserve banking**, making it "more scalable than stablecoins."
    
*   Future features may include **interest payments** and **deposit insurance**—unavailable in most stablecoins.
    

**Behind the Scenes**:

*   JPMorgan filed a **"JPMD" trademark** days before the announcement, covering crypto trading, payments, and custody.
    
*   The bank’s existing **Kinexys Digital Payments** (formerly JPM Coin) handles **$2B daily transactions**, though this is a fraction of its **$10T/day** traditional payment volume.
    

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### 🔹 **Deposit Tokens vs. Stablecoins: JPMorgan’s White Paper Insights**

A prior JPMorgan whitepaper outlined key distinctions:

**Feature**

**Deposit Tokens (e.g., JPMD)**

**Stablecoins (e.g., USDC)**

**Backing**

Commercial bank deposits

Cash/treasuries (1:1)

**Regulation**

Part of banking system

Varies (often uninsured)

**Use Cases**

Cross-border payments, programmable settlements

Crypto trading, DeFi collateral

**Scalability**

Higher (fractional reserves)

Limited (full reserves)

**Executive Skepticism**:

*   **Emma Lovett**, JPMorgan MD, warned at _DigiAssets 2025_: "The stablecoin market risks becoming **fragmented** as firms push proprietary tokens."
    
*   She predicted a shakeout: "In 2–3 years, we’ll see which stablecoins survive."
    

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### 🔹 **Broader Trends: GENIUS Act & Institutional Adoption**

The JPMD pilot coincides with:

1.  **U.S. Regulatory Momentum**:
    
    *   The **GENIUS Act** (passed 68–30 in Senate) mandates **1:1 reserves**, AML controls, and consumer protections for stablecoins.
        
2.  **Global Competition**:
    
    *   EU risks falling behind as U.S./Asia lead digital asset adoption (_Franklin Templeton exec_).
        
3.  **Banking Sector Moves**:
    
    *   **Santander**, **Deutsche Bank**, and **PayPal** are testing blockchain-based settlements.
        

**Base Blockchain’s Role**:

*   "Transfers should take **seconds, not days**," declared Base on X. "Commercial banks are going on-chain."
    

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### 🔹 **What’s Next?**

*   **Regulatory Hurdles**: JPMD’s expansion hinges on approvals for **interest-bearing features** and multi-currency support.
    
*   **Market Impact**: If successful, deposit tokens could redefine institutional crypto liquidity—without destabilizing traditional banking.
    

**Bottom Line**: JPMorgan isn’t just experimenting with blockchain; it’s **reengineering money itself** for the digital age.

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*Originally published on [Isabellan](https://paragraph.com/@-isabellan/jpmorgan-launches-jpmd-deposit-token-pilot-claims-superiority-over-stablecoins-targets-institutional-users)*
