Less than two years after CEO Jamie Dimon promised to fire for cause (“stupidity”) any employee who traded bitcoin and called cryptocurrency “fraud,” JPMorgan Chase & Co. (NYSE: JPM) is on the cusp of issuing the first cryptocurrency backed by a major U.S. bank. So-called JPM Coin will be one of a breed of cryptocurrencies known as stablecoins, meaning that the currency is backed by real assets (typically U.S. dollars) on a one-for-one basis.

Stablecoins (also known as tokens) are developing as a mechanism to speed up money transfers on transactions like international payments and corporate debt issuances. A fiat-currency backed digital currency could clear in seconds, as opposed to current transfers that require a receiving bank to first verify that the sending bank has the funds to cover the transaction in a process, which can take days or even weeks.

In its announcement of the new token, JPMorgan noted:

We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. … Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.

The question of why a bank would want or need to exchange value over a blockchain in the first place is not addressed. JPMorgan has its own private blockchain, called Quorum Blockchain, and the bank said that JPM Coin would also work on “all standard Blockchain networks.”

Because a private blockchain is, essentially, a centralized data store maintained by its owner, it’s not entirely clear why JPMorgan thinks a private blockchain will speed up payments, even if the blockchain is eventually available to other networks.

And to some degree, the trust that JPMorgan highlights as a feature of its blockchain and JPM Coin flies in the face of one of the blockchain’s key selling points: the absence of trust. In a functioning blockchain, transactions don’t require trust because every transaction is recorded exactly once and cannot be changed. If a change is attempted, the entire blockchain is invalidated.

JPMorgan’s head of blockchain projects, Umar Farooq, told CNBC:

So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction. The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this.

Time will tell.

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