Deposit Tokens vs. Stablecoins: Will JPMD Replace USDC for Institutions?
JPMorgan Chase has launched JPMorgan Deposit Token (JPMD), a permissioned, interest-bearing blockchain token for large institutions. Backed by commercial bank deposits, JPMD offers deposit insurance, direct integration with existing treasury systems, and on-chain settlement via the Base network. Unlike widely used stablecoins such as USDC and USDT, which serve retail, remittance, and DeFi markets on multiple blockchains, JPMD is restricted to pre-approved corporate clients. While stablecoins address speed and accessibility across borders, deposit tokens provide legal certainty, yield, and regulatory compliance. Constraints include permissioned access, capital requirements under Basel rules, and potential ecosystem silos if institutions favor Ethereum mainnet or alternative Layer 2 solutions. Most experts expect stablecoins and deposit tokens to coexist: JPMD dominating high-value, regulated B2B use cases and stablecoins retaining open-access roles in retail payments and DeFi.
Neutral
The introduction of JPMD is an evolution in institutional digital cash, offering yield and bank-backed security. However, its permissioned nature limits broad adoption, preserving stablecoins’ role in open markets. Similar to banks issuing tokenized deposits in past pilots, JPMD will coexist with stablecoins rather than replace them outright. In the short term, trading volumes of USDC/USDT may see minor shifts among institutional desks exploring JPMD, but stablecoin liquidity and retail demand remain unaffected. Long term, both models could carve out distinct niches: permissioned deposit tokens for high-value treasury operations and open stablecoins for global remittances and DeFi.