Investment giant, JPMorgan, has informed the public about its plans to apply for a patent for the creation of a distributed system that issues vital depository receipts using blockchain technology. The receipts are more or less like initial coin offering tokens. JPMorgan filed the patent application in January. On Thursday, it was published by the United States Patent and Trademark Office (USPTO). The patent gives a summary of how users who are on the distributed network will be able to tokenize their assets as well as trade the virtual depository receipts.
JPMorgan Makes Another Bold Move In The Blockchain Industry
For the security tokens to be generated, the asset owner or broker (depending on who the originator is), will keep the assets safe by handing them over to a qualified custodian. The qualified custodian will be the one to authorize virtual receipts for the assets deposited.
The depository receipt will be a security token. So, it will be regulated like other tokens by the SEC. This will restrict how these tokens will be traded as well as where they can be traded. The nature of the asset will determine if the token holder will be able to redeem the said receipt by transferring the underlying asset to the custodian. The custodian will be the one to cancel the tokens.
JPMorgan believes that the proposed system will allow companies to host IPOS on a blockchain. This process is more or less going to fulfill the same promise of initial coin offerings. However, the company will most likely never admit this truth or refer to the process as initial coin offering.
An Overview of JPMorgan
JPMorgan a subsidiary of JPMorgan Chase and Co. JPMorgan Chase and Co is the sixth largest bank in the world and the largest bank in the United States. The company is a multinational New York based investment bank with assets worth over $2.534 trillion. As per market capitalization, it is the most valuable bank in the world.