JPMorgan’s deposit token keeps access restricted on public blockchain in limited first step

JPMorgan’s deposit token retains access restrictions even on a public blockchain, limiting participation to existing bank customers. The arrangement represents a small step into public blockchain settlement, according to Austin Campbell.

In an October 23 interview with CoinDesk, Campbell, founder and CEO of Zero Knowledge, described JPMD as a permissioned token operating in a permissionless environment. Access to the underlying blockchain does not mean unrestricted access to the token, he explained.

Campbell said JPMD users must be whitelisted, which requires being a current customer of JPMorgan Chase Bank. He compared its eligibility restrictions to those of tokenized equities and said the structure allows JPMorgan to limit its exposure while using a public blockchain.

JPMD would not become an asset available for permissionless use on Aave or Uniswap, Campbell said. He described it as a tool for settling trades that could use the Ethereum blockchain.

Campbell also linked the move to the need for payment instruments to settle tokenized equity transactions. Buying shares requires a means of paying for them, he said, characterizing JPMD as a response to tokenized equities and JPMorgan’s move as the smallest possible step into public blockchain use.