JPMorgan Chase is furthering its involvement in the cryptocurrency field by launching a stablecoin-like token called JPMD.

The US banking giant revealed on Tuesday that it plans to launch so-called "deposit tokens" on Coinbase's public blockchain Base (built on the Ethereum network). Each deposit token is designed to serve as a digital mapping of commercial bank deposits.

JPMD will provide 24-hour settlement services for customers and support interest payments to holders. It is a "permissioned token", which means it is only available to JPMorgan Chase's institutional clients - unlike many public-facing stablecoins.

“We expect institutions to use JPMD for on-chain digital asset settlements and cross-border inter-corporate transactions,” Naveen Mallela, global co-head of Kinexys, JPMorgan Chase’s blockchain unit, said on Tuesday.

“Given that deposit tokens will also eventually accrue interest, this will make them more interchangeable with existing deposit products currently used by institutions,” he added.

Deposit Tokens vs. Stablecoins

JPMorgan Chase noted that the advantage of launching deposit tokens rather than stablecoins is that it provides institutional clients with a faster and more convenient way to move funds while still maintaining a close connection to the traditional banking system.

Stablecoins are digital tokens designed to always be pegged 1:1 to fiat currencies, with the most well-known examples being Tether (USDT) and Circle’s USDC. The global stablecoin market is worth about $262 billion, according to CoinGecko data.

In the U.S., stablecoins are still generally unregulated — although that could soon change. The U.S. Senate is set to vote on the GENIUS Act on Tuesday, legislation that would introduce a formal regulatory framework for such tokens.

Elsewhere, the European Union regulates stablecoins through the Markets in Crypto-Assets Regulation (MiCA), and the U.K. has also unveiled plans to regulate the crypto industry. The U.K. Financial Conduct Authority (FCA) is currently seeking comments on a proposal that would require stablecoin issuers to ensure that tokens maintain a value peg to a specified asset.

The head of JPMorgan Chase's digital assets division said the bank chose Coinbase as its blockchain partner because the crypto exchange is already a long-term customer and a leader in the crypto space.

Malela added that JPMD has received "initial interest from large institutional players who want a more native on-chain cash solution from a well-known financial institution."

Speculation about JPMorgan Chase's new crypto product continued to heat up after the bank made its "JPMD" trademark application public on Monday. The trademark covers a wide range of crypto services under the JPMD brand, including trading, exchange, transfer and payment services for digital assets.

Several crypto media outlets have previously speculated whether the bank will launch its own stablecoin, but JPMorgan Chase said that while its token may have some similarities to stablecoins, they are essentially different types of products.