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The token issuance and transfer will be denominated in dollars, and institutional clients will be able to use the deposit tokens for transactions, with plans to expand to other users and currency denominations pending regulatory approval. The JPMD pilot marks an expansion of JPMorgan's blockchain efforts, and deposit tokens like JPMD are seen as a superior alternative to stablecoins, offering potential advantages such as interest-bearing and deposit insurance.
“From an institutional standpoint, deposit tokens are a superior alternative to stablecoins,” Mallela said. “Because they are based on fractional banking, we think it is more scalable.” Advantages include that deposit tokens like JPMD could be interest-bearing in the future and covered by deposit insurance, Mallela said. Major stablecoins today are not.
