JPMorgan Takes Deposit Tokens Public with Launch of JPMD on Base

It’s the first time a global systemically important bank (G-SIB) issues a deposit-based product on a permissionless chain.

The GENIUS Act just cleared the U.S. Senate — and markets loved it. COIN surged 16%, CRCL rose 34%. Circle is now up 540% since its IPO two weeks ago. Safe to say the underwriters are drowning in thank-you notes from BlackRock and co.

In its current form, the bill gives traditional banks a distinct advantage: stablecoin issuers are prohibited from passing on yield, which makes tokenized deposits appear more attractive by comparison. Especially as JPMorgan prepares to bring those deposits to Base — marking the first time commercial bank money will be issued natively on a public blockchain. Today’s edition breaks down why this matters.

Plus, we’ll talk about:

  • Exclusive: Support for European stablecoin reform grows

  • Ubyx raises $10 million to build a clearing network for stablecoins

  • Interview: Ben Brophy, Solana’s new Head of Institutional Growth Europe

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HIGH SIGNAL NEWS

Tokenization

  • Luxembourg issues first native digital Treasury notes. The Luxembourg Treasury issued €50 million in blockchain-native, zero-coupon notes via HSBC’s Orion platform. Listed on the Luxembourg Stock Exchange, the bonds exist only onchain — unlike tokenized versions of traditional securities.🇱🇺

  • Coinbase wants to launch tokenized stocks in the U.S. The U.S. exchange platform has requested a no-action letter from the SEC to offer traditional equities on blockchain to U.S. customers. The initiative was described as a “top priority” by CLO Paul Grewal in comments to Reuters.🔔

Stablecoins

DIGITAL MONEY

JPMorgan Takes Deposit Tokens Public with Launch of JPMD on Base

First time: JPMorgan is bringing commercial bank money to a public blockchain. The bank’s blockchain division Kinexys will launch JPMD, a permissioned, dollar-denominated deposit token, on Base — the Ethereum Layer 2 developed by Coinbase. This marks the first time a global systemically important bank (G-SIB) issues a deposit-based product on a permissionless chain.

Pilot project: The rollout begins as a limited-access pilot for whitelisted institutional clients. Use cases include cross-border B2B payments, digital asset settlement, and onchain liquidity management.

  • “Over the coming months, we plan to expand access,” Kinexys Global Head of Blockchain Naveen Mallela told Blockstories. Future iterations could also support other currencies.

Why Base? JPMorgan chose Base for its mix of public infrastructure and institutional safeguards. Though technically permissionless, it’s run by a centralized sequencer operated by Coinbase — offering predictable governance and an operational fallback. The bank cited Base’s “low latency, cost-efficient settlement, and alignment with institutional-grade compliance” as key reasons.

The stablecoin alternative: Unlike stablecoins, which are fully backed 1:1 with liquid reserves and will most likely not be allowed to offer yield, JPMD operates under existing banking regulations. That means it can be fractionally reserved, potentially interest-bearing, and in some cases insured.

  • “This structure makes deposit tokens a more scalable and regulated option for institutions seeking trusted onchain cash alternatives”, said Mallela.

Moving beyond private rails: JPMD is JPMorgan’s first deposit token issued directly on a public blockchain — but not its first interaction. Just weeks ago, the bank used Kinexys to settle a delivery-versus-payment (DvP) transaction for a tokenized asset on Ondo Chain, signaling early steps toward bridging its internal systems with open networks.

  • Meeting with SEC: The shift is strategic. On Tuesday, JPMorgan met with the SEC Crypto Task Force to discuss how capital markets activity could migrate to public blockchains.

Kinexys Digital Payments: That expansion builds on a solid foundation. Since 2019, Kinexys Digital Payments (formerly JPM Coin) has processed over $1.5 trillion in cumulative volume, with average daily flows now topping $2 billion. The platform supports multi-currency settlement in USD, EUR, and GBP, and serves institutional clients across five continents.

One risk remains: Basel Committee rules currently treat deposit tokens on permissionless chains nearly as harshly as crypto — due to concerns over governance and systemic risk. For now, JPMorgan is moving cautiously and may argue that Coinbase’s operational role mitigate those concerns.

There are still many open questions around how JPMorgan will draw the line between Kinexys and public blockchain deployments. Will different use cases naturally split across these rails? Will Kinexys serve purely internal JPM flows while public chains become the interface with the broader crypto economy?

The most obvious framing is this: Kinexys is JPMorgan’s high-speed, compliant payment backbone for cross-border treasury and internal settlement among known clients. Deploying on public infrastructure — starting with Base — is about meeting clients where the future is happening: onchain. It’s JPMorgan giving institutional clients access to tokenized financial assets of the future without losing them to stablecoin rails or fintech challengers. That’s both a defensive and an offensive strategy.

JPMD, in this context, marks the beginning of a new chapter for digital money. It positions tokenized deposits as the institutional-grade alternative to stablecoins and tokenized MMFs — offering some of the programmability and liquidity features of stablecoins, with the balance sheet strength and interest potential of a bank.

Much remains to be solved, especially around capital treatment, issuance frameworks, and interoperability. But the direction is clear: tokenized deposits could become the default for banks, while stablecoins power fintechs, wallets, and consumer-facing apps that don’t aspire to be banks. And the competition for onchain liquidity management may be the most interesting battleground of all.

Richard Astle is VP, Business Lead for the Fireblocks Network, where he oversees the growth and strategic direction of one of the largest institutional digital asset networks globally.

We’ve been seeing this coming for a while. Stablecoin-related payments have already become one of the largest use cases across the Fireblocks Network — and that trend is accelerating. What JP Morgan is doing now is the natural next step: moving from internal blockchain-based deposit accounts to permissioned tokens on a public chain like Base.

The decision builds on years of groundwork — internal discovery, regulatory calibration, and infrastructure investment. As the world’s largest dollar clearer, JPMorgan can’t afford to be disrupted by stablecoins — launching JPMD on Base is a way to stay ahead while still retaining control.

The big question now is how they scale distribution. Onboarding institutional users into a permissioned token system sounds simple — but for a bank like JP Morgan, opening a bank account could be a 6 month process per client. That kind of friction kills momentum. So either they’ve found a way to streamline onboarding, or they’re working with intermediaries like Coinbase, which already banks with JPM and could help scale access through delegated whitelisting.

That's also why choosing Base is likely a strategic bet here: semi-permissioned, institution-friendly, and backed by a counterparty they already trust. Going forward, I'd expect more public chains to follow.

REGULATION

Exclusive: Support for European Stablecoin Reform Grows As U.S. Moves Forward

U.S. stablecoin bill advances: On Tuesday, the Senate officially passed the GENIUS Act — a bill aimed at regulating stablecoins — marking the first time a major crypto bill has cleared Congress’s upper chamber. The bill now heads to the House of Representatives where it needs to be reconciled with the STABLE Act.

Europe is watching closely: According to Blockstories sources, several European public authorities and industry leaders are watching the U.S. legislative process with growing unease — fearing a potential loss of competitiveness if Europe fails to adapt.

Paris Europlace leads quiet resistance: Since February, several meetings on stablecoins have been held within Paris Europlace, the influential French financial lobbying group whose 600+ members include BNP Paribas, Crédit Agricole, Euroclear, and SWIFT.

Key concerns: A confidential Europlace report obtained by Blockstories outlines two major concerns:

  1. Reserve requirements: MiCA forces stablecoin issuers to hold up to 60% of reserves in cash — a constraint that doesn’t exist under the GENIUS Act, and one that makes euro-denominated stablecoins less economically viable.

  2. Yield restrictions: While current U.S. proposals still ban yield-bearing stablecoins (similar to MiCA), the issue is under active discussion in Washington — and industry leaders are watching closely for any signs of change.

Regulatory reform by 2026? According to the same report, Europlace has now prioritized stablecoins as a strategic concern. The working group is expected to deliver targeted recommendations for reform within the framework of the upcoming European Innovation Act, scheduled for late 2025 or early 2026.

Signals from Brussels: While the European Central Bank (ECB) remains firmly opposed to the development of stablecoins — largely to promote its own retail and wholesale CBDC initiatives — the European Commission appears more open to constructive input.

  • Backdoor meetings: According to our sources, informal meetings between Commission officials and regulated issuers have already taken place behind closed doors — a sign that Europlace’s upcoming proposals may find a receptive audience in Brussels.

A calculated wait: For now, pro-stablecoin advocates are holding their fire. According to several participants in the talks, they are waiting for the final U.S. vote to use it as a political wedge — positioning Europe’s sluggishness as a sovereignty risk if it fails to keep up with U.S. innovation.

Stanislas Barthelemi is President at Adan, the leading European professional association dedicated to supporting the digital assets sector.

As the U.S. inches closer to regulatory clarity, pressure is mounting in Europe to act. The EU was first to regulate stablecoins with MiCA — but first-mover advantage is fading fast. Two provisions are now in the spotlight: restrictive reserve thresholds (30% to 60%) and the blanket ban on yield distribution. Both risk putting EU issuers at a structural disadvantage.

The stakes go beyond innovation. At risk is the euro’s long-term role in international trade. To stay competitive, Europe must rethink its approach and update the MiCA framework. Flexible instruments like no-action letters or regulatory sandboxes could help align protection with progress, and sovereignty with market relevance.

A conversation with Ben Brophy, the newly appointed Head of Institutional Growth for Europe at the Solana Foundation. Before joining Solana in June, Ben led blockchain efforts at Fidelity International as Head of Blockchain.

  1. DAMA 2 Litepaper: Institutional Blueprint for Asset Tokenization (Deutsche Bank) — Deutsche Bank outlines a technical blueprint for issuing and servicing tokenized assets on an Ethereum Layer 2. The paper introduces DAMA 2 as a modular system built with partners like Memento (zkSync) and Axelar, focused on privacy, interoperability, and compliance.

  2. DLT in the Real World (Report by ISSA & Accenture) — Based on responses from 355 financial institutions, this industry survey tracks how DLT is being deployed across use cases like settlement, tokenization, and collateral.

  3. Interview with Sandy Kaul from Franklin Templeton (Podcast) — A conversation with Franklin Templeton’s Head of Innovation on the asset manager’s tokenization strategy.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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