Beyond the hype: how JPMorgan is truly transforming crypto while staying pragmatic

For several months now, the crypto world has been buzzing about JPMorgan and its tokenized dollars on blockchain. Some see it as a Wall Street revolution, while others consider it overhyped; a more nuanced reality is emerging: it’s not so much a dramatic break as a gradual adaptation to the concrete demands of institutional clients. The banking giant didn’t suddenly discover a passion for digital assets — it’s simply responding to a growing and very tangible need.

This is exactly where the disconnect lies between the hype and the facts. JPMorgan isn’t quietly seeking to revolutionize anything. Instead, the bank is building an infrastructure for its clients who have been requesting it for years.

From private blockchain to public layer: a strategic evolution

The story begins long before the present moment. In 2019, JPMorgan had already implemented a system of deposit accounts on a permissioned version of Ethereum, then known as Onyx — later renamed Kinexys Digital Payments. At that time, the project remained confined within the bank’s walls, out of the public eye.

The change occurs when clients come forward with a simple but significant request: they need access to these services on public chains. “Currently, the only liquid option available on public blockchains is stablecoins,” explains Basak Toprak, product manager for tokenized deposits at JPMorgan. “We identified that there is a real demand for a banking deposit product enabling payments on these public chains, especially among institutional clients.”

That’s why JPM Coin — identified by the symbol JPMD — is now launching on Base, Coinbase’s fast and cost-efficient Ethereum 2 layer. This isn’t a decision taken lightly. It reflects JPMorgan’s gradual acceptance that the true market — where its clients actually do business — is increasingly on public blockchains.

The real demand behind the hype

Before getting carried away with the implications, it’s important to understand who is actually using JPM Coin and why. The early adopters aren’t retail traders seeking quick returns. They are asset managers, brokers, and other participants in the crypto ecosystem who maintain established business relationships with platforms like Coinbase.

The use case is clear: these clients hold collateral at Coinbase and make margin payments for crypto purchases. Previously, this activity was either done with stablecoins or via traditional bank accounts held off-chain — each approach with its own drawbacks.

“Off-chain bank accounts suffer from settlement delays, while stablecoins introduce a different risk profile for institutions that are just entering this space and feel more comfortable with bank deposits,” Toprak explains. JPM Coin thus offers a third way: a digital claim on the bank’s funds, capable of serving as both a store of value and, unlike regulated stablecoins, generating interest for its holders.

This is the true demand justifying the deployment. No silent revolution, no secret master plan — just clients knocking on the door saying, “We need this.”

Cousins but not twins: tokenized deposits versus stablecoins

Naturally, the emergence of JPM Coin raises the question of competition with stablecoins. Both products potentially target the same uses: payments, settlements, collateral management. Brian Foster, Coinbase’s global head of institutional markets, acknowledges the kinship: he considers tokenized deposits as the “cousins” of traditional stablecoins.

However, an important distinction exists. Stablecoins are tokens on public chains generally not supervised by a single bank. JPM Coin, on the other hand, is a claim on a well-regulated banking institution, with all the accompanying control mechanisms. For cautious institutional clients, this difference can be decisive.

Foster also notes a major challenge for JPMorgan: interoperability. A token locked within a bank can only easily be exchanged among that bank’s clients. To truly compete with stablecoins that operate freely across the entire blockchain ecosystem, JPMorgan will need to figure out how to export its product beyond its own borders.

“I wouldn’t claim that one is inherently better than the other — the market will tell us,” Foster says. “The real challenge for banks will be figuring out how to make this product useful outside their own walls.”

Moving to the public blockchain: how the bank manages risk

Something remarkable is happening: a systemically important institution is now openly operating on a public blockchain. This would have seemed unthinkable a few years ago, and it deserves attention. How can a bank, given its systemic exposure and regulatory obligations, feel confident enough to deploy on a public chain?

Toprak explains that this confidence has been built gradually over the years. “Everything we deploy is subject to our comprehensive internal governance, which reviews every risk associated with the new product,” she states. “We have demonstrated to our internal teams that we can do this in a highly controlled manner because we control the smart contract itself. No one else does.”

Control measures are precise: JPMorgan stores private keys securely, enforces role separation, and retains exclusive authority to move tokens from one address to another. JPM Coin is a permissioned token — it can only be transferred between authorized parties, i.e., truly integrated clients of the platform.

Furthermore, Toprak emphasizes that public blockchains have been operational for years and have demonstrated their fundamental stability and security. “Deploying on a public blockchain doesn’t fundamentally differ from using any other technological layer for an application,” she argues. “The infrastructure of public chains is where major innovation is happening today. That’s where our clients are turning, so that’s where we need to be.”

This approach reflects a broader philosophy: banks must each determine their acceptable level of risk and choose their point of engagement on the technological continuum. For JPMorgan, this means building a locked-down, isolated infrastructure on the blockchain, while gradually making it more interoperable as confidence grows.

Beyond the novelty: the real stakes

Returning to the initial question: why is the market so excited about JPM Coin? Because it symbolizes something that seemed impossible not long ago: Wall Street publicly accepting that the future of certain financial operations will be on blockchain. That’s no trivial matter.

But the real work isn’t technological deployment — it’s navigating distribution. A bank can easily create a useful product within its own ecosystem. The true test will be its ability to make it available beyond its own boundaries. Stablecoins have an intrinsic advantage in this regard: they circulate freely wherever there’s a blockchain.

JPMorgan will need to solve: how to make JPM Coin as fluid and accessible as the stablecoins it aims to complement? That’s the underlying unresolved question behind all this excitement. For now, the hype is justified — but turning it into real market dominance remains to be demonstrated.