JPMorgan’s Dimon Signals Stablecoins Are Here to Stay

But his comments during the bank’s second-quarter earnings call on Tuesday (July 15) indicate that the nascent digital holdings will be a fixture on the world stage, and certainly as JPMorgan competes with digital upstarts to deliver new payment modalities.

The conference call comes in the wake of the announcement last month that JPMorgan Chase plans to launch a “deposit token” that will serve as a digital representation of commercial bank money and will be available only to the bank’s institutional clients. The token’s known as JPMD, and would exist as a direct alternative to stablecoins, which “peg” to the dollar or a basket of currencies.

“We’re going to be involved in both JPMorgan deposit coin and stablecoins to understand it, to be good at it,” Dimon said, as noted in PYMNTS coverage of the conference call. The skepticism on stablecoins in general — which are not the direct representations of money — appeared in his comments that “we don’t know exactly, and I think they’re real, but I don’t know why you’d want a stablecoin as opposed to just payment.”

He added that the bank would have to get involved more fully in the stablecoin industry as FinTechs make headwind in the space. JPM is also exploring additional paths with stablecoins.

Outside the Walled Garden

An analyst noted to Dimon that, with the deposit token, “I get how that makes sense in terms of the customers that are inside your walled garden, but it doesn’t help them much in terms of dealing with customers outside of your garden. What’s holding up you guys and the other banks getting together to issue something jointly — somewhat to what you’ve done with Zelle — and prevent these stablecoin companies like Circle coming in offering a more convenient solution to your customers?”

“That’s a great question,” answered Dimon, “and it remains a question … you’re raising a very important point about interoperability of stablecoins and deposits and the movement of money and what problem you’re trying to solve … you can assume we’re thinking about all that.”

PYMNTS has reported in past weeks that banks are in the midst of exploring a collaborative effort on stablecoins, which would include JPMorgan, Bank of America, Wells Fargo and Citigroup. Ostensibly the coin would be jointly issued and operated.

The U.S. Senate passed the GENIUS Act in June and the House is teeing up to vote on that legislation to create a federal regulatory framework.