When JPMorgan Chase debuted their JPM Coin about two weeks ago, many in the financial industry believed that this was the first traditional financial institution to launch Ethereum-based token services. However, new reports have revealed that Signature Bank, launched this services long before JPMorgan Chase and already has more than 100 active users.
JP Morgan Vs Signature Bank
On the first of January 2019, Signature Bank created a blockchain-based payment system called Signet. The native tokens on the blockchain are called Signets and it was pegged to the USD. The Signet payment platform was built on a permissioned Ethereum blockchain according to Signature Bank. Scott Shay, a co-founder at the bank, during an interview with Forbes, said:
“We are using Ethereum’s blockchain with our walled garden. This means we will be maintaining this blockchain. It is a private and permissioned blockchain. We can decide to maintain private keys. We will be refreshing the blockchain ourselves. So, there is no need to have independent miners. There certainly aren’t any independent miners and the blockchain refreshes every 5 to 25 seconds.”
While Signature Bank isn’t as big as JPMorgan Chase, it is the 40th largest bank in the States. Also, it is the first FDIC-insured bank to debut an Ethereum-based platform for token services. The bank has full approval from the New York Department of Financial Services.
Keep in mind that while Signature Bank already has a fully functional platform, JPMorgan Chase hasn’t even started its trials. The Signet payment platform is already being used by 100 clients and the volume on a daily basis is already in millions. The platform reports tens of millions of dollars some days. American PowerNet is one of the companies using the Signet payment platform. APN is an independent energy supply company that offers services on a retail and wholesale basis in the United States. The Signature blockchain platform is the first in the be used for transactions in the renewable energy payment sector.
Signature Bank Has Regulatory Approval For It Blockchain-based System
From the announcement by JPMorgan on the 14th of February, there is still some work to be done on the regulatory front before the launch of its JPM Coin. However, Signature Bank already has approval from the required bodies. The financial institution admitted that getting approval was lengthy and thorough. It also stated that the New York Department of Financial Services was happy with the platform as it signaled technological growth.
The company decided to use a private and permissioned blockchain so as to meet regulatory requirements. This is because the public blockchain may not comply with regulatory requirements for banks. The company stated that it had no intention of switching to a public blockchain. The Signet payment platform has KYC and AML policies integrated into it allowing it to spot bad actors efficiently. While the system attends to retail and institutional clients, it is more focused on institutional clients as a significant amount of funds is needed for smooth operation.
The Signet and JPMorgan Chase Ethereum-based platforms attend to the same needs. However, for the sake of history, it is important to note that JPMorgan is not the first traditional financial institution in the United States to offer Ethereum-based token services.
What do you think? Will the JPM Coin eventually outperform Signature Bank’s Signet? Share your comments.