In an era where digital assets and traditional finance are accelerating their integration, the world's largest banks and financial institutions in Asia are actively embracing blockchain technology and the wave of tokenization with different strategies. JPMorgan Chase is attempting to reshape the future of institutional finance within a compliance framework through its innovative "JPMD" tokenized deposit program; meanwhile, Asian banks view stablecoins like USDT and USDC as key defensive tools to address deposit outflows and losses in transaction revenue. These seemingly different paths together depict a profound transformation of the global financial system in the digital age.
The recent trademark application for "JPMD" submitted by JPMorgan Chase has attracted widespread attention in the financial community. JPMD is not a speculative token or a traditional stablecoin, but a form of customer deposits based on blockchain, designed to seamlessly integrate into existing banking infrastructure. Essentially, JPMD tokens represent the dollar deposits held by institutional clients at JPMorgan Chase, which can be transferred, traded, or used for payments across supported blockchain networks.
The difference between JPMD and stablecoins: Unlike stablecoins such as USDT or USDC, which are issued by private companies and typically backed 1:1 by cash or equivalents, JPMD is directly issued by a regulated bank, supported by a fractional reserve, and aims for deep integration with the banking system. Institutional experts believe that JPMorgan Chase, with decades of operational and regulatory experience, has advantages in risk management, operations, and product innovation, which could be potential strengths of JPMD compared to other stablecoins. JPMD is positioned as a trusted and compliant entry point for blockchain-based finance, providing institutions with a way to engage in digital assets while maintaining regulatory standards.
From JPM Coin to JPMD: A strategic shift towards public chains: JPMorgan Chase is no stranger to digital tokens, having processed over $1.5 trillion in institutional payments on a private blockchain since the launch of its JPM Coin in 2019. The difference with JPMD lies in its choice to pilot on a public chain (specifically, the Ethereum Layer-2 network Base developed by Coinbase). This choice indicates JPMorgan Chase's intention to expand into a broader ecosystem in the future and is interpreted by industry insiders as a signal that permissioned chains and permissioned distributed ledger technologies (DLTs) may have hit a dead end in certain areas of innovation and product development. By leveraging Base's high throughput, low transaction fees, and compatibility with Ethereum infrastructure, JPMorgan Chase aims to explore practical applications of blockchain that go beyond the proof-of-concept stage.
The future vision for JPMD: Currently, JPMD is only available for institutional use. However, if the pilot is successful and the regulatory environment permits, future iterations may support cross-border commercial payments, fund management solutions, and programmatic settlements for corporate finance. The emergence of JPMD signifies that banks, payments, and capital markets are beginning to exist securely and legally on-chain, and it may become a template for how traditional finance can embrace blockchain innovation without compromising security or oversight.
In contrast to JPMorgan Chase's top-down exploration of tokenization, Asian banks are viewing stablecoins like USDT and USDC as a defensive tool to address deposit outflows and losses in transaction revenue. According to CoinDesk, stablecoins are playing an increasingly important role in the region's financial channels.
Defensive strategies to address threats: Amy Zhang, head of Fireblocks in Asia, stated that major banks in South Korea, Japan, and Hong Kong are actively exploring local currency stablecoins to mitigate the risk of deposit loss due to customers turning to USDT and USDC for cross-border transactions. For example, eight major banks in South Korea are forming a consortium to launch a Korean won stablecoin by 2026 in direct response to the surge of USDT and USDC in local cross-border transactions. Japanese banking giants are also trialing stablecoins pegged to the yen to simplify trade financing. Banks in Hong Kong are also piloting their own stablecoin settlement networks.
The push from payment service providers: Payment service providers (PSPs) are actively promoting the adoption of stablecoins to escape the costly traditional banking channels. Fireblocks processed over $30 trillion in digital assets last year, with stablecoins accounting for about half of its transaction volume, particularly seeing increased usage among Asian e-commerce giants. Visa Analytics dashboards also show a 30% increase in stablecoin transaction volume over the weekend, highlighting their role in retail and gig economy usage.
The landscape of stablecoins in the Asian market: Tether's USDT dominates the circulation of stablecoins in emerging Asian markets due to its liquidity and accessibility. In contrast, USDC has gained traction in strictly regulated financial centers like Singapore and Hong Kong. As financial institutions in the region defensively adopt stablecoins, corporate users pragmatically operate stablecoins, and the quiet transformation of Asian cross-border financial infrastructure may become the next headline in the history of stablecoin development.
Whether it is JPMorgan Chase promoting the tokenization of institutional finance within a compliance framework through JPMD, or Asian banks viewing stablecoins as defensive tools to address market challenges, it is clear that the global financial system's acceptance and deep integration of digital assets are accelerating. This integration is not only reflected at the technological level but also touches the core functions of financial services—payments, settlements, and asset management. As more digital financial tools combine with underlying blockchain infrastructure, future on-chain financial transactions will become richer and more derivative, while compliance will help deepen the integration with traditional finance. A new global financial landscape driven by digital assets is taking shape.
Related: From "Off-chain Assets" to "On-chain Finance": The Tokenization of Physical Assets Enters the Fast Lane of Mainstream Adoption
Original article: “Global Financial Giants Embrace Tokenization: JPMorgan Chase's JPMD Leads the Change, Asian Banks Respond to Deposit Outflows with Stablecoins”
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