- JPMorgan’s pilot puts real commercial bank money on a public chain for the first time, starting with a transaction on Coinbase’s Base.
- JPMD represents tokenized dollar deposits and is designed for institutional clients, offering a scalable blockchain-native alternative to stablecoins.
- The deposit token runs on Base but remains permissioned, with JPMorgan planning broader currency support based on future regulatory decisions.
JPMorgan has initiated a pilot for JPMD, a U.S. dollar deposit token deployed on Coinbase’s Base blockchain. The pilot introduces commercial bank-backed digital money to a public blockchain for the first time, marking a shift in how traditional finance engages with decentralized infrastructure.
JPMorgan Expands Digital Strategy with Public Blockchain Integration
The pilot will involve the movement of a fixed amount of JPMD from JPMorgan’s digital wallet to Coinbase. The token, representing dollar deposits, will be used by Coinbase’s institutional clients for on-chain transactions. JPMorgan plans to run the trial for several months before expanding its availability, including adding other currencies, subject to regulatory approval.
Naveen Mallela, global co-head of Kinexys, JPMorgan’s blockchain division, said the bank is taking a new step with this initiative: “It’s the first time that a commercial bank is putting commercial money, a deposit-based product, on a public chain and we are starting with Base.”
The Base blockchain, a public Layer 2 built by Coinbase and linked to Ethereum, was selected for its low fees and high speed. With nearly $4 billion locked in applications, Base has rapidly become a preferred choice for developers and institutions alike.
Deposit Tokens Offer a New Option for Institutional Blockchain Use
Unlike stablecoins, which are backed by highly liquid assets such as U.S. Treasuries, JPMD represents a direct claim on deposits held at JPMorgan. The bank views this structure as a more efficient and scalable option for institutional use.
“From an institutional standpoint, deposit tokens are a superior alternative to stablecoins,” Mallela stated. “Because they are based on fractional banking, we think it is more scalable.” He added that future versions of deposit tokens could be interest-bearing and fall under deposit insurance, which most stablecoins currently lack.
This pilot is a continuation of JPMorgan’s years-long strategy to digitize commercial bank money. The bank already operates Kinexys Digital Payments, formerly JPM Coin, which facilitates fiat transactions across corporate accounts. That network now handles over $2 billion in daily transfers, though Mallela expects JPMD to serve a distinct user base.
Institutional Adoption Signals Broader Blockchain Shift
JPMorgan’s approach reflects a growing trend among major financial players seeking efficient, blockchain-native payment systems. Banks such as Deutsche Bank, Santander, and PayPal have also begun testing digital asset technologies for payment settlement and cross-border transfers.
In a previous white paper, JPMorgan predicted that “deposit tokens will become a widely used form of money within the digital asset ecosystem,” similar to how commercial bank deposits dominate fiat circulation today. The JPMD pilot positions the bank to support that evolution.
Though JPMD will remain permissioned and limited to institutional clients during its test phase, the move demonstrates a concrete step toward integrating traditional finance into the broader public blockchain economy.
