A crypto currency has been created by US investment bank JP Morgan to allow a section of its customers who are in the wholesale business to be able to make payments in digital currencies.
This is the first time that a digital coin has been developed by a US based major bank. The bank said that the blockchain technology based and run crypto currency has already been successfully used for shifting of money from the bank and a client account.
According to the bank, there is enough potential in crypto currencies in causing a reduction of risks and make possible instant money transfers.
Even though bitcoin had been publicly criticised by JP Morgan’s chief executive Jamie Dimon on multiple occasions, the bank now claims that potential of blockchain technology is something that it had always belief in. Bitcoin is the oldest and the largest of the digital currencies.
“We are supportive of crypto-currencies as long as they are properly controlled and regulated,” Umar Farooq, JP Morgan’s head of Digital Treasury Services and Blockchain, wrote in an online Q&A page.
Iwners of digital coins can make use of them for making payments in the real world such as for rents for a hotel room, food and even for purchasing a house. Online wallets are the places where digital tokens are held and owners of such coins can send them anonymously to other owners or users of such digital online wallets. This is the reason that crypto currencies are an attractive proposition for those users who are interested in illegal purchases on the Dark Web which is that part of the internet that is not indexed by search engines.
On the other hand, the technology that crypto currencies are based is blockchain technology which is a ledger of blocks of information which includes transactions or agreements which are stored on computers across a network. The networks store this information in a chronological manner and such interview can be accessed to a specific community of users. There is usually no central authority that manages block chains such as banks which control the conventional financial systems or governments. No one can change the information after it is published in a certain block. In case anyone attempts to change or alter the data, it becomes very clear instantly.
Crypto currencies were created about ten years ago with the help of this blockchian technology and some other and bitcoin was the first blockchain-based cryptocurrency.
None of the retail customers of JP Morgan would be able to use JPM Coin. Initially only use of the coin would be for internal purposes for allowing instant transfer of payments between institutional accounts.
Whenever any customer would deposit any money in with the Bank, it would instantly be changed into JPM Coins of equal value. Then those coins would be put to use by the bank for transactions over the blockchain network Quorum of the bank with other clients such as movement or payment of money for securities transactions.
And after the completion of the transaction, those who hold JPM Coins would be able to get an equivalent amount in US dollars fr4om the bank.
(Adapted from BBC.com)