JPMorgan Advances Tokenized Dollars Using Coinbase's Base Layer-2 to Enhance Institutional Crypto Payments
JPMorgan has transitioned its JPM Coin (JPMD), a tokenized digital deposit representing claims on existing bank funds, from its private Ethereum-based Kinexys chain to the public Coinbase Base layer-2 network. This strategic move responds to increasing institutional demand for on-chain payments and utilizing bank deposits as collateral or margin in crypto trades on public blockchains.
Originally launched in 2019 on a permissioned Ethereum variant (Onyx/Kinexys), JPMorgan's blockchain deposit accounts are now being expanded to the Base platform to facilitate broader on-chain usage. JPMD transfers remain restricted to whitelisted JPM Coin clients, including asset managers and broker-dealers connected to Coinbase, who use the token primarily for collateral management and margin payments for cryptocurrency purchases.
Coinbase characterizes tokenized deposits like JPMD as a 'cousin of stablecoins' and highlights the necessity for banks to develop methods for exporting and distributing these digital deposits beyond their internal ecosystems. JPMorgan emphasizes strict risk controls encompassing internal governance, exclusive bank control over the token, secure key management, and clear separation of roles prior to deploying on a public chain.
This development unfolds amid wider industry scrutiny, where bodies like the Bank for International Settlements have issued warnings about risks tied to open crypto systems. JPMorgan, however, positions public-chain infrastructure as a continuing source of innovation driven by client needs, quietly reshaping how Wall Street moves money.
