JPMorgan Chase has endorsed tokenized bank deposits as superior to stablecoins, citing growing regulatory alignment with traditional fiat systems. According to the bank's research led by Nikolaos Panigirtzoglou, regulators outside the U.S.—including the Bank of England—favor these instruments for preserving banking safeguards like central bank liquidity access, capital buffers, and AML compliance.
The bank is actively testing its permissioned deposit token JPMD on Ethereum's Base layer-2, signaling institutional commitment. CEO Jamie Dimon questioned stablecoin utility, stating: "I don’t know why you’d want a stablecoin as opposed to just payment." Regulators particularly prefer non-transferable (non-bearer) tokenized deposits that settle at face value, minimizing price deviation risks and upholding "singleness of money" principles—unlike stablecoins vulnerable to market fluctuations from credit concerns.
This shift threatens dominant stablecoins like USDC and USDT, as tokenized deposits integrate blockchain while maintaining traditional protections. Diverging regulatory approaches emerged: U.K. authorities discourage bank-issued stablecoins due to reserve yield constraints, while the U.S. GENIUS Act (backed by former President Trump) promotes domestic stablecoin usage by banks. JPMorgan filed a trademark for JPMD in June, targeting applications in settlements and cross-bank transfers.