JPMorgan Chase & Co. expects its newly created cryptocurrency to speed payment processes between institutions and, potentially, auto dealerships. The currency, called JPM Coin, is a 1:1 fiat currency and will be issued over the bank’s proprietary blockchain technology. “It’s still early, but [blockchain and JPM Coin] could be great for our dealers and common customers,” spokeswoman Shannon O’Reilly told Auto Finance News.
In the past, JPMorgan Chase has been hesitant to adopt blockchain verbiage — preferring instead the moniker “distributed ledger” — because blockchain is not well understood, it’s mischaracterized, and it’s associated with other types of cryptocurrency, Kevin Point, head of product development at Chase Auto Finance, said during a panel discussion at the American Financial Services Association’s Vehicle Finance conference in January.
However, blockchain technology presents plenty of practical applications for the auto industry, Point said. Tracking a vehicle’s lifecycle through its VIN, fleet management and servicing, and commercial loan financing can all benefit from the transparency offered by blockchain, he added.
Still, implementation has been slow. “We’re being very methodical about it because we need to get [blockchain] right,” Point said. “We need to get it right with regulators and understand that everyone needs the same level of education. There’s got to be a common understanding of what it is and what it isn’t.”
Although JPM Coin is still a prototype, according to the bank, JPMorgan Chase has developed it as a simplified exchange of payment — making it collateralized, permissioned, and exclusive for institutional customers.
