Eddie Wen 

Managing Director 

Global Head Digital Markets 

February 2020

Stablecoins
JPM Coin*

* JPM Coin is a prototype. JPMorgan Chase w ill complete all internal procedures and satisfy all regulatory and compliance obligations, prior to any live products or services being launched utilizing JPM Coin 

 What is JPM Coin and who will be able to use it? 

 JPM Coin is a digital coin designed to facilitate instantaneous payments using blockchain technology. 

 JPM Coin will be issued on Quorum protocol-based blockchain networks to start, but support for 

networks based on other blockchain protocols may be subsequently developed based on client 

demand. JPM Coin will be operable on all standard blockchain networks.

 Only institutional customers passing J.P. Morgan compliance requirements ( KYC) can transact with 

these. 

 Is JPM Coin a currency or legal tender? 

 The JPM Coin isn’t money per se. It is a digital coin which clients can redeem for U.S. dollar (USD) 

credited to their accounts at JPMorgan Chase N.A. 

 In short, a JPM Coin always has a value equivalent to one USD. 

 Over time, JPM Coin will be extended to other major currencies, subject to client demand. The product 

and technology capabilities are currency agnostic.

 What are the potential use cases in the future for JPM Coin?

 Blockchain & DLT payments platform

 Corporate internal liquidity management

 Securities Delivery Vs Payment 

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How JPM Coin* works

Simplified Illustrative Example

Client Deposit 

Account

Distributed 

Ledger

Step 1: Coin Issuance Step 2: Coin Transfer Step 3: Coin Redemption

ClientDeposit 

Account

Client Deposit 

Account

A J.P. Morgan Chase Bank client instructs a debit of

its deposit account. Client’s account is debited for the

instructed amount and client receives an equivalent

number of JPM Coins

JPM Coins are transferred at client’s initiation over a

blockchain network with other J.P. Morgan clients

Holders of JPM Coins redeem them for USD at 

J.P. Morgan Chase Bank, receiving credit to a deposit 

account 

Distributed 

Ledger

Distributed 

Ledger

* JPM Coin is a prototype. J.P. Morgan w ill complete all internal procedures and satisfy all regulatory and compliance obligations, prior to any live products or services being launched utilizing JPM Coin.

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A globally consistent taxonomy for privately issued stablecoins is critical

Depository Coin

 Digital representation of customer 

deposits in a single fiat currency 

held at a Bank or other highly 

regulated financial institution

 Redemption “at par” 

 Designed to minimize/eliminate volatility inherent in existing cryptocurrencies 

 May be pegged to real-world assets (e.g., Fiat) or controlled by ‘algorithmic monetary policy’

 Most common use to improve the efficiency of payments systems

 Could be used for wholesale or retail payments 

Stablecoin

*Algorithmic Coin, Central Bank Digital Currencies not covered in this presentation

Claim Only 

(regulatory capital requirements apply)

Fixed Redemption 

Asset Backed Coin

 One-for-one backing with real 

assets, which could be fiat 

currency(s) or another asset type 

 Redemption “at par”, supplemented 

by claim on issuer should market 

value of asset pool fall below par

Asset Pool + Claim

Variable Redemption 

Asset Backed Coin

 One-for-one backing with real 

assets, which could be fiat 

currency(s) or another asset type 

 Variable redemption based on 

market value of asset pool

Asset Pool Only 

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Core principles should guide regulation and oversight of digital assets, including stablecoins

Activities-Based 

Regulation

 Digital assets or other 

products in financial 

markets that result from 

the use of new 

technologies, should be 

subject to activitiesbased regulation, and 

oversight to ensure 

consumer/investor 

protection and the 

reduction of systemic 

risk.

Minimum Standards for 

DLT networks

 Blockchain networks, or 

other DLT’s, engaging in 

financial services 

activities should meet 

certain minimum 

standards to promote fair, 

effective, and efficient 

systems and reduce 

systemic risk. 

 Network, ledger, and 

participant security are 

key elements to these 

standards. 

Globally Consistent 

Oversight

 A coherent, globally 

consistent approach to 

the oversight and 

supervision of blockchain

or DLT-based activity will 

minimize regulatory 

arbitrage opportunities 

and encourage 

innovation.

Ongoing Regulatory 

Engagement 

 Given the rapid pace of 

technological change, 

regulators and market 

participants should 

continually engage to 

ensure that consistent 

understanding of latest 

developments leads to 

appropriately-calibrated 

oversight of innovative 

technologies in financial 

services. 

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