The digital token will supposedly be named the "JPM Coin" and will - unsurprisingly - be used to settle payments between the New York-based bank's clients.
He also claims that over time, JPM Coin will be extended to other major currencies.
In a recent statement Umar Farooq, JPMorgan's blockchain lead, has noted three of the likely uses of the JPM coin.
This is a major breakthrough in the future of cryptocurrency, which has so far been mostly shunned by the global banking industry who saw it as a risk not worth taking, while its price rate plummeted throughout a year ago.
For some, J.P. Morgan's new currency may come as an unexpected development for a technology that rose from the wreckage of the financial crisis and was supposed to disrupt the established banking world.
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"The JPM Coin isn't money per se".
A "tiny fraction" of the bank's $6 trillion in daily transactions will be conducted by its newly created "JPM Coin" to settle worldwide payments at any time of the day and within seconds, said Umar Farooq, head of J.P. Morgan's blockchain projects. The first will be to settle global payments for institutional clients. "The applications are frankly quite endless; anything, where you have a distributed ledger which involves corporations or institutions, can use this". These now rely on wire transfers and use decades-old networks like Swift which have cut-off times for transactions in different countries.
Furthermore, Farooq was also noted by CNBC as stressing that there are more potential use-cases for JPM Coin in the future.
Secondly, JP Morgan's token may also be used for securities transactions. Rather than relying on wires to buy the issuance - resulting in a time gap between settling the transaction and being paid for it - institutional investors can use the J.P. Morgan token, resulting in instant settlements. "It could also be used to provide instant settlement for securities issuances, as well as to replace US dollars at held internationally by subsidiaries of major corporations using JPMorgan's treasury services".
"Money sloshes back and forth all over the world in a large enterprise", he said in remarks cited by CNBC. Farooq continued that: "Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit?" JPM Coin will be operable on all standard Blockchain networks. New types of digital coins (some better than others) pop up regularly, and while nobody can predict the future, it doesn't look like many of them will be going anywhere anytime soon. "That way, they can consolidate their money and probably get better rates for it".