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JP Morgan has gone live with its first blockchain transaction for its corporate clients in Europe using its own token.
The JPM Coin transaction was conducted by Siemens AG, the large Germany-based conglomerate, in a Euro-denominated payment on the JP Morgan’s permissioned blockchain. A bank executive told Bloomberg that this was the first Euro-denominated JPM Coin transaction.
A permissioned blockchain is a distributed ledger that is not publicly accessible. The bank said that JPM Coin is only made available to its institutional clients, and only for settling payments.
Banks and other TradFi companies have been exploring ways to use blockchain technologies as part of their business. For them, conducting transactions on a blockchain is a potential way to speed up settlement in a secure way.
JP Morgan first launched its Coin Services division in 2019. This allowed transfers between various client accounts to take place 24/7 using the blockchain instead of traditional payment rails, like wire transfers. Rather than being confined only to business hours, transactions on the ledger can happen at any day or time.
Though it is now four years old, transactions made using the JPM Coin add up to about $300 billion. According to JP Morgan, it processes about $9.8 trillion in daily payments.
Further, JP Morgan’s clients are not the only ones who have been making use of crypto to do business.
On Thursday, German software giant SAP announced that it was using Circle’s US Dollar Coin (USDC) to test cross-border payments. SAP, the largest non-American software company by revenue, said this would hasten the pace for SMEs trying to send money overseas.
USDC is a stablecoin, a cryptocurrency pegged to a stable asset, which in this case is the U.S. dollar. The company said that customers can now receive USDC as “play money” to test out the payment option. These tests will run off of a separate blockchain than Ethereum, and it does not involve real ERC-20 dollar tokens—yet.
Crypto firms have relied on the blockchain to process payments and move digital assets, and so have banks that serviced the sector. Before it was shuttered, New York-based Signature Bank operated the Signet that facilitated conversions from crypto into traditional fiat currency.