As the stablecoin market becomes increasingly congested, JPMorgan Chase is quietly pushing forward with another on-chain solution that is more aligned with the banking system.

On June 18, JPMorgan Chase announced the official launch of the JPMD deposit token pilot, which will first be deployed on the Base public blockchain supported by Coinbase. JPMD is not a stablecoin in the traditional sense but rather the result of JPMorgan Chase's years of blockchain experimentation.

Unlike traditional stablecoins backed by asset pools, JPMD represents the right to request real deposits from JPMorgan Chase accounts, fully integrated into the banking regulatory framework.

Naveen Mallela, Co-Head of Kinexys Global, pointed out that deposit tokens may have interest-bearing functionality in the future and will be included in deposit insurance, offering higher scalability and financial security compared to some reserve-based stablecoins.

In fact, JPMorgan Chase launched its internal settlement system, JPM Coin, as early as 2019. This JPMD pilot is the first time it has opened up to the public blockchain for exploration.

Currently, JPMorgan Chase's Kinexys Digital Payments Network processes over $2 billion in on-chain transactions daily, but this is still a trial phase compared to the bank's overall daily transaction volume of up to $100 trillion. Base officially announced: "Commercial banks are going on-chain, and capital flows will say goodbye to daily timing."

With regulatory signals becoming clearer, the differences between deposit tokens and stablecoins are increasingly being discussed.

Recently, a JPMorgan Chase executive admitted at the DigiAssets 2025 Conference that the stablecoin market may face "fragmentation and congestion risks," as each institution issuing its own stablecoin could potentially lead to market fragmentation.

In a previous whitepaper, JPMorgan Chase systematically explained that deposit tokens are essentially commercial banks' currency extended in the blockchain scenario, and they may become a core digital financial payment tool in the future.

Meanwhile, the U.S. stablecoin regulatory framework has reached a critical juncture. On June 18, the U.S. Senate passed the GENIUS Act with high votes, setting unified compliance standards for stablecoins. The act requires one-to-one reserves, anti-money laundering, and consumer protection mechanisms, which will likely drive compliant stablecoins into larger-scale adoption.

Globally, Santander, Deutsche Bank, PayPal, and others are also accelerating their blockchain payment and settlement layouts. JPMorgan Chase's JPMD pilot not only strengthens its discourse power in the institutional payment sector but also sends a strong signal that traditional finance is proactively integrating into the on-chain financial ecosystem.

Whether deposit tokens will become the "on-chain dollar" version of commercial banks is worth continuous attention.