With its deposit token debut, J.P. Morgan is setting the pace for global banks in bringing institutional finance on-chain

J.P. Morgan’s playbook for adopting emerging technology is starting to show a familiar pattern. The bank approached AI and generative AI with a methodical process, starting with research and use-case design, securing regulatory alignment, building internal tools, and upskilling its internal teams. It has also taken a similar approach with blockchain, beginning with the 2019 rollout of its JPM Coin.

In June this year, J.P. Morgan launched a USD J.P. Morgan Deposit Token (JPMD) proof-of-concept (PoC) on Base, a public blockchain built by Coinbase. Kinexys by J.P. Morgan is the bank’s blockchain business unit, focused on bringing institutional finance on-chain.

JPMD is an alternative to stablecoins for cash settlement and payments use cases for the bank’s institutional clients. While there’s still time for it to be ready for primetime, it’s a preview of where institutional finance could be heading. 

On paper, it’s a contained proof of concept: a token designed for institutional applications like cross-border settlements, real-time liquidity access, and blockchain-based treasury management. But beneath the surface, it suggests that traditional FIs like J.P. Morgan (JPM) are starting to build blockchain infrastructure from the ground up. And not in the walled gardens of private chains, but in public, composable environments where crypto lives.

Even if the use cases are still gestating, the move invites a closer look; what problems JPM thinks it’s solving, why now, and how this could reshape the pipes of business-to-business money movement in the long run.

This piece unpacks those choices and sketches out what B2B payments might look like when legacy finance meets open infrastructure.

What sparked the creation of JPMD

At the core of JPMD’s launch is the question of what specific B2B payment challenges JPM intends to address.

In its recent publication, ‘The next generation monetary and financial system,’ the Bank for International Settlements (BIS) writes about singleness, elasticity, and integrity as being three foundational aspects of sound money. These attributes are best fulfilled by central bank and commercial bank money. BIS opines that stablecoins are inadequate on all three counts.

Referencing that, Naveen Mallela, Global Co-Head of Kinexys by J.P. Morgan, explains that Kinexys by J.P. Morgan has long shared a similar view that commercial bank money is foundational to digital currencies. Over the past five years — beginning with what is now Kinexys Digital Payments — the business unit has been working to bring M1 (commercial bank money) on-chain.

“JPMD is a further evolution of those efforts with our launch on public blockchain chains,” Mallela says. 

“Not a stablecoin, it is a deposit token…”

It’s important to understand that JPMD differs from private stablecoins or experimental models like CBDCs, especially in terms of governance, collateralization, and its role within institutional workflows.

“JPMD is not a stablecoin; it is a deposit token – a digital representation of a bank deposit that operates on blockchain rails,” emphasizes Mallela. 

JPMD is designed for compatibility with existing financial infrastructure and may ultimately receive the same treatment as other bank deposits, including potential eligibility for deposit insurance. Institutional clients can treat JPMD as bank deposits on their balance sheet, providing certainty around financial and accounting treatment.

Since deposit tokens are treated similarly to traditional bank deposits, they are subjected to similar liquidity frameworks, explains Mallela. That means they can be more scalable and better integrated into existing institutional financial systems. 

“JPMD’s goal is to give institutional clients and their customers a secure, credible way to transact on-chain using a bank-issued digital cash equivalent,” he adds.

Why JPMD found its home on Coinbase’s public blockchain

JPM’s choice of Coinbase’s Base stems from the crypto exchange being a long-standing client and a prominent player in the Web3 space, making it a natural collaborator for Kinexys’ pilot of JPMD.

Additionally, the buildout of the on-chain settlement ecosystem for institutional participants in crypto and real-world asset (RWA) transactions is a particular focus of Coinbase. “JPMD would provide additional optionality to institutions beyond stablecoins for digital cash solutions on Base, the Ethereum Layer 2 blockchain built within Coinbase,” notes Mallela. 

He adds that they’ve already received early interest from major institutional players looking for native on-chain cash solutions from reputable financial institutions, solutions that are interoperable with the deposit-based products they already use. 

“These institutions typically participate actively in both crypto and real-world asset (RWA) digital transactions, which is why native on-chain deposit-based cash solutions fit well with their needs,” says Mallela.

How J.P. Morgan sees JPMD transforming enterprise use cases

JPMD will enable J.P. Morgan’s institutional clients to engage with public blockchain transactions for use cases such as facilitating payments and redemption of digital assets like tokenized money market funds, enabling round-the-clock cross-border payments, and serving as on-chain collateral. 

The 24/7/365 cross-border settlement is accompanied by automated initiation triggers and will also have specific applications for native Delivery-vs-Payment (DvP)-type use cases for digital asset settlements. 

“Blockchain-based deposit solutions, which we have been scaling over the last 3-4 years on Kinexys Digital Payments, will have more of a general-purpose usage for a variety of use cases, but both will be complementary and co-exist alongside stablecoins,” notes Mallela.

“We envisage that clients will continue to use Kinexys Digital Payments Blockchain Deposit Accounts to access broader treasury solutions that operate with an account-based deposit product,” he shares.

In the broader context, these offerings are designed to complement each other, offering clients both account-based deposits on a private chain and token-based products on a public chain, depending on what best suits their treasury and cash flow needs.

Tracking Adoption: Key indicators for JPMD’s wider rollout

Since JPMD is still in the proof-of-concept stage, J.P. Morgan will likely have to identify key metrics or signals to gauge its traction and determine when it’s ready for broader adoption. 

“As with all our products, we build and scale them in tandem with clients’ usage,” answers Mallela. 

In the case of JPMD, the bank says it has been receiving significant interest from clients, partly due to the growing attention around stablecoins, and clients’ preference for alternatives provided by banks, which they already use. 

“We are working closely with our clients to translate this interest into practical use cases to scale the adoption of JPMD,” he notes.

[Sidebar:] You’re not banking with J.P. Morgan, but your platform might be…

The rise of embedded finance has blurred the lines between digital platforms and traditional financial services. What used to be simple payment integrations have evolved into deeply embedded financial systems, now powering everything from seller payouts to capital access, all within the platforms where users already work.

Take Walmart’s 2025 integration of J.P. Morgan Payments as a case in point. By embedding banking infrastructure directly into its Marketplace, Walmart created a connected environment for sellers to manage cash flow and receive payments without ever leaving the platform. On Walmart’s part, this was about control, compliance, and the ability to serve tens of thousands of sellers — from side hustlers to global brands — without layering on too much complexity. J.P. Morgan Payments, in turn, found a new distribution model: not as a standalone destination, but as the financial backbone operating BTS within other platforms.

This shift highlights a deeper trend: banks no longer need to be the storefronts of finance. Instead, they can become the infrastructure that powers platforms where financial decisions actually happen. According to Jeff Lin, Head of Industry Product Solutions for Embedded Finance & Solutions at J.P. Morgan Payments, this isn’t a threat to traditional banking but an expansion of its reach. Banks still rely on branches and relationships, but embedded finance lets them move where the economic activity already is: inside marketplaces, SaaS platforms, and ecosystems where users are already transacting and growing.

Like with all emerging models, this model also raises new challenges. Embedded solutions need to be flexible enough to serve wildly different seller profiles, customizable without overwhelming, and compliant by design. 

What makes it a success is whether the smallest seller can reconcile payouts in their accounting software as easily as a multinational brand can access working capital during peak seasons. If embedded finance gets that right, banks can go a notch higher than just power platforms; it can make them smarter, more inclusive, and better aligned with the businesses they serve.