JPMorgan to Launch USD Deposit Token JPMD in Partnership with Coinbase for Pilot Test

On June 17, JPMorgan Chase & Co. has announced the launch of a new deposit token named JPMD, representing the bank’s U.S. dollar deposits. The initiative marks a significant step in the financial giant’s adoption of blockchain technology and its integration into the digital asset ecosystem. The pilot, conducted on Coinbase’s Layer-2 Ethereum network, Base, aims to test the token’s functionality for institutional clients, enabling seamless, round-the-clock on-chain dollar transactions.

JPMD: A Tokenized Deposit for Institutional Efficiency

JPMD is a permissioned token representing dollar deposits held at JPMorgan, the largest bank in the world by assets. Unlike stablecoins, which are typically issued by non-bank entities and backed by a mix of assets, JPMD is directly tied to the bank’s deposit base, offering a regulated and bank-backed digital asset.

Naveen Mallela, global co-head of JPMorgan’s blockchain division Kinexys, told Bloomberg that the bank plans to conduct its first pilot transaction in the coming days. The test will involve transferring a fixed amount of JPMD tokens from JPMorgan’s digital wallet to Coinbase, the largest cryptocurrency exchange in the United States. The token is designed to facilitate faster and more secure dollar-based transactions for institutional clients, leveraging the efficiency of blockchain technology. According to Mallela, the transaction will be denominated in USD, with plans to support additional currencies pending regulatory approval.

Collaboration with Coinbase

This experiment is expected to take place on Base, Coinbase’s Ethereum Layer-2 blockchain, which offers lower transaction costs and faster processing times compared to the Ethereum mainnet. The partnership with Coinbase underscores JPMorgan's interest in collaborating with established players in the crypto space. Base, launched by Coinbase in 2023, has processed over $400 billion in transaction volume, making it a reliable platform for institutional-grade pilots. By leveraging Coinbase’s Base blockchain, the pilot seeks to test the scalability and interoperability of JPMD in a real-world environment.

Once the pilot phase concludes, Coinbase’s institutional clients will gain access to JPMD for on-chain transactions, potentially expanding the token’s use cases. JPMorgan has emphasized that JPMD’s design allows for future scalability, with potential features like interest-bearing capabilities and coverage by the Federal Deposit Insurance Corporation (FDIC), setting it apart from existing stablecoins.

JPMorgan’s Blockchain Ambitions

JPMorgan has been a pioneer among traditional financial institutions in exploring blockchain technology. Back in 2019, JPMorgan introduced JPM Coin on its private blockchain, Quorum. In 2020, the bank launched Onyx, a blockchain platform (later restructured into the Kinexys digital payments division), which has processed over $1.5 trillion in interbank payments using a private stablecoin pegged 1:1 to USD, EUR, or GBP. Kinexys handles approximately $2 billion in daily transaction volume, demonstrating the bank’s capacity to support large-scale digital asset operations. Recently, Kinexys collaborated with Ondo Finance and Chainlink to complete a cross-chain delivery-versus-payment (DvP) settlement test, signaling ongoing efforts to enhance interoperability with public blockchains.

JPMorgan recently filed a trademark for “JPMD,” covering a range of digital asset services, including trading, exchanges, transfers, clearing, and payment processing. This move suggests the bank’s ambition to expand its blockchain offerings through JPMD. In the future, JPMD could integrate with platforms like Kinexys, potentially broadening the scope of JPMorgan’s blockchain services, though such plans remain unconfirmed.

Additionally, JPMorgan has softened its stance on cryptocurrencies, allowing clients to purchase Bitcoin and accepting spot Bitcoin exchange-traded funds (ETFs) as collateral for loans, despite CEO Jamie Dimon’s long-standing criticism of Bitcoin as a “Ponzi scheme.”

Industry Outlook and Next Steps

The pilot arrives amid a favorable regulatory environment for tokenized finance. On June 17, the U.S. Senate passed the GENIUS Act, advancing it to the House for review. This legislation marks the first U.S. bill to establish a regulatory framework for stablecoins and digital assets. Additionally, recent discussions between JPMorgan and the SEC on blockchain-based capital markets indicate a push for clearer guidelines, which could pave the way for broader JPMD adoption. Unlike stablecoins like USDT or USDC, which face scrutiny over reserve transparency, JPMD’s bank-backed model may appeal to regulators and institutional clients seeking compliance and stability.

However, JPMD’s launch is not without challenges. At the DigiAssets 2025 conference on June 17, JPMorgan executive Emma Lovett cautioned that the stablecoin market risks “overcrowding” due to fragmentation if every company issues its own token. Despite these systemic challenges, JPMorgan is moving forward with JPMD to leverage its strengths as a traditional financial institution.

Following the pilot, JPMorgan will evaluate the performance of JPMD and its integration with Coinbase's Base blockchain. If successful, the bank may expand the use of deposit tokens across its global operations, further bridging the gap between traditional finance and blockchain technology.