JPMorgan pilots tokenized deposit token on Base, targeting instant dollar transfers

JPMorgan will pilot a dollar-denominated deposit token called JPMD on Coinbase’s Base blockchain within days, global blockchain division co-head Naveen Mallela said in an interview with Bloomberg News on June 17. 

The test will transfer a fixed amount of JPMD from the bank’s digital wallet to Coinbase, making the token available to selected institutional users for payments and settlements.

Coinbase’s institutional clients will then employ JPMD for on-chain transactions. JPMorgan anticipates that the trial will run for several months before being expanded to other client segments and additional currency denominations, pending regulatory approval.

JPMD represents a claim on deposits held at the bank and differs from stablecoins that rely on segregated securities reserves.

Mallela called deposit tokens “a superior alternative” for institutions because they operate inside the fractional-reserve banking system, may earn interest, and could qualify for deposit insurance. 

JPMorgan already clears more than $2 billion a day over its private Kinexys Digital Payments network, formerly JPM Coin.

Commercial banking on-chain

The announcement follows JPMorgan’s June 16 trademark filing for “JPMD,” which covers trading, transfer, and payment services tied to digital tokens. The filing cites electronic fund transfers, custody, and real-time token trading, all of which are under the bank’s ownership.

Base confirmed the collaboration on June 17, adding:

“It will be the first token of its kind on a public blockchain, enabling fast, secure, 24/7 money movement between trusted parties. […] Moving money should take seconds, not days. Commercial banking is coming on-chain.”

According to Mallela, JPMorgan’s whitepaper on deposit tokens argues that commercial bank money already accounts for more than 90% of circulating funds and will likely assume a comparable share in digital form. 

Furthermore, JPMorgan expects institutional demand for a bank-issued alternative to stablecoins to drive early use of JPMD. 

Pending a successful pilot and regulator clearance, the bank intends to scale issuance volumes and add currency options, positioning deposit tokens as a core tool for cross-border settlement and on-chain liquidity management.

Large banks and corporations, such as Bank of America and the Depository Trust & Clearing Corporation (DTCC), have increased blockchain experiments as Congress advances stablecoin legislation that could formalize reserve and audit rules.

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