JPMorgan Pilots Blockchain-Based Deposit Tokens on Base, Backed by Real Bank Dollars

JPMorgan Chase - America’s largest bank with over $3.8 trillion AUM - is piloting a new financial instrument: JPMD, a deposit token issued on Base, Coinbase’s Ethereum Layer 2 network. Unlike stablecoins or CBDCs, deposit tokens are directly backed by commercial bank deposits, offering institutional-grade safety for onchain transactions.

This pilot marks JPMorgan’s latest push into tokenized finance, following a wave of interest from traditional banks seeking to secure relevance in an onchain future.

What Are Deposit Tokens and Why Are They Different?

Deposit tokens behave like stablecoins on the surface, but under the hood, they’re issued by licensed, regulated banks and backed by actual deposits, not reserves in a smart contract or algorithmic collateral. That means:

• Onchain payments backed by real dollars
• FDIC-equivalent safety levels
• Instant settlement without reliance on stablecoin providers

JPMorgan’s whitepaper claims deposit tokens are the “key to a safer tokenized economy.”

Coinbase’s Base Network Chosen for Deployment

The choice of Base, an Ethereum Layer 2 built by Coinbase, is strategic. Base provides:

• Low gas fees
• Scalability for institutional throughput
• Seamless Ethereum compatibility

This pilot builds on growing momentum among legacy finance players adopting Layer 2 infrastructure for digital asset settlement.

Why This Matters to Institutions

According to JPMorgan’s own Financial Times op-ed, 97% of institutional investors believe tokenization is the future of finance. Deposit tokens - unlike stablecoins or central bank digital currencies (CBDCs) - offer the best of both worlds:

• Trust of a regulated bank
• Speed and flexibility of blockchain
• No exposure to algorithmic risks or Treasury-backed volatility

The Bigger Picture: JPMorgan’s Tokenized Ecosystem

This pilot isn’t a one-off. JPMorgan has already:

• Filed trademarks for digital asset services
• Built a full-stack tokenization strategy with Onyx
• Supported tokenized treasury bonds and collateral systems

And now, with JPMD live on Base, the bank is quietly replacing yesterday’s payment rails with commercial bank–backed tokens that settle in seconds.

JPMorgan’s move signals a turning point for traditional finance. Deposit tokens like JPMD could render stablecoins obsolete for institutions, ushering in a regulated, blockchain-native future for payments and settlements. If this pilot succeeds, every major bank may be forced to follow.

‍