JPMorgan Chase & Co. (NYSE:JPM) is reportedly exploring the development of a blockchain-based digital deposit token to enhance the efficiency of international transaction settlements.

As Bloomberg reported, the largest bank in the U.S. has already laid the groundwork for this innovative payment method. It still requires approval from U.S. regulators to proceed officially.

These digital deposit tokens act as representations of deposit claims against commercial banks and function on a blockchain, offering fast settlements and potential cost savings.

Pending regulatory approval, JPMorgan could potentially introduce this product to its corporate clients within the next year.

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A spokesperson from JPMorgan remarked deposit tokens present numerous potential advantages. The company also acknowledged regulators would exercise caution and thoroughness before granting approval for the development and adoption of any new product.

Additionally, the spokesperson noted the bank's existing blockchain infrastructure could facilitate the introduction of deposit tokens relatively swiftly.

In a previous experiment, the bank conducted tests involving the issuance of deposit tokens in a single transaction as part of the Monetary Authority of Singapore's Project Guardian.

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