JPMorgan Pilots JPMD Token on Base to Challenge Stablecoin Models with Regulated Digital Deposits

First U.S. Bank-Issued Deposit Token Hits Public Blockchain

JPMorgan Chase has launched the pilot of its new digital deposit token, JPMD, on Coinbase’s Base, an Ethereum layer-2 blockchain. This development marks the first instance of a major U.S. commercial bank issuing a permissioned deposit token on a public blockchain network. Unlike traditional stablecoins backed by cash or equivalents, JPMD is a tokenized representation of commercial bank deposits. The initiative is tailored for institutional clients only, offering a regulated, potentially interest-bearing alternative to stablecoins, with the long-term goal of enabling seamless on-chain settlements and cross-border transactions.

The pilot, announced between June 17 and 18, 2025, will see a fixed quantity of JPMD transferred from JPMorgan’s internal digital wallet to Coinbase’s infrastructure. Initially, all transfers will be denominated in U.S. dollars, though support for additional currencies may follow depending on regulatory progress. JPMorgan selected Base for its low fees, rapid transaction speeds, and dominant share among Ethereum layer-2 networks. The token itself remains accessible only to institutional clients within a permissioned framework, complying fully with existing banking regulations. This restricted access model ensures compatibility with traditional finance while exploring blockchain-native capabilities like 24/7 settlement and programmable payments.

Naveen Mallela, global co-head of JPMorgan’s Kinexys division (formerly Onyx), highlighted JPMD’s role in bridging institutional finance with blockchain. He noted that early institutional feedback has shown strong interest in using JPMD for on-chain settlement of digital assets and cross-border B2B transactions. The token's regulated origin and potential for yield stand out in a market dominated by stablecoins that lack direct ties to the banking system and are largely unregulated in the U.S. JPMorgan has clarified that JPMD is not a stablecoin initiative, despite market speculation following its June 15 trademark filing covering digital asset trading, exchange, and payments.

The bank positions deposit tokens like JPMD as a more scalable and fungible alternative to stablecoins, particularly because they can eventually become interest-bearing and align with existing deposit products. By comparison, stablecoins such as USDT and USDC — which together represent a coin market cap of roughly $262 billion — are not integrated into the banking framework and do not offer yield, making them potentially less attractive for institutions seeking both compliance and capital efficiency.

This pilot underscores JPMorgan’s ongoing evolution from its JPM Coin project toward more open and interoperable digital payment solutions. Kinexys Digital Payments will continue to operate alongside JPMD, serving both private blockchain environments and this new hybrid model. Legal analysts interpret the launch as a strategic move to address growing competition from yield-bearing stablecoins that could threaten traditional deposit structures. As NYU professor Austin Campbell observed, U.S. banks are increasingly anxious that such products may erode core banking models, prompting initiatives like JPMD to enter the crypto price index landscape with a regulated offering.

Over the next several months, the pilot will assess technical performance, user interest, and regulatory developments. If successful, JPMorgan could expand JPMD to support multiple currencies and broaden institutional access. Future integration with other public blockchains may also be explored, potentially unlocking use cases involving programmable finance, such as smart contract-triggered payments or escrow functions. The project signals a new phase in the alignment between the banking system and crypto infrastructure, as traditional finance begins embedding itself directly within the broader coin market cap ecosystem.

This article has been refined and enhanced by ChatGPT.