JPMorgan Chase Pilots JPMD Deposit Token on Base Blockchain

JPMorgan Chase is expanding its presence in the blockchain sector by piloting its newly launched deposit token, JPMD, on the Base network. The financial institution aims to leverage Coinbase’s Ethereum scaling solution for this initiative, according to Naveen Mallela, an executive at JPMorgan’s blockchain division, Kinexys.

The pilot program involves transferring a fixed amount of JPMD tokens to crypto exchange Coinbase in the coming days. This transfer will utilize Base—a layer-2 blockchain that has secured the largest market share among Ethereum sidechains, as per CoinGecko data—and is designed to operate with dollar-denominated assets, with additional currencies expected to be supported following regulatory approvals.

Total Value Locked (TVL) on Base has increased significantly over the past year. — *Base’s total value locked (TVL) has more than doubled over the past year. Source: DefiLlama.*

Assuming the pilot phase—projected to extend over several months—proves successful, JPMD will become accessible to Coinbase’s institutional clientele for facilitating transactions.

Deposit Tokens vs. Stablecoins

JPMorgan announced the pilot shortly after filing a trademark application for JPMD, signaling broader ambitions in digital asset services, including trading, transfers, and payment processing. Unlike stablecoins, which are digital fiat proxies collateralized by cash and cash equivalents, JPMD represents actual dollar deposits residing in customers’ bank accounts.

“From an institutional standpoint, deposit tokens are a superior alternative to stablecoins,” Mallela told Bloomberg, noting the scalability advantages offered by their fractional reserve backing.

— Naveen Mallela, JPMorgan Blockchain Executive

Mallela further highlighted the potential for JPMD to generate interest, differentiating it from most stablecoins, which typically do not yield returns.

Industry experts, however, caution that yield-bearing stablecoins could pose a challenge. Austin Campbell, a professor at New York University, has suggested that powerful US banking interests may be reacting with concern, fearing such instruments could disrupt established financial models.

Austin Campbell comments on yield-bearing stablecoins' potential threat to traditional banking. — *Austin Campbell says yield-bearing stablecoins could disrupt traditional banking. Source: Austin Campbell.*

Banking lobbyists have confirmed concerns that rising yield-bearing stablecoins could “harmed” traditional financial institutions, reflecting an ongoing tension between innovative fintech solutions and established banking infrastructure.