"When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time," according to Umar Farooq, head of Digital Treasury Services and Blockchain at the bank.

In this way, it differs from other cryptocurrencies in that it is not intended for use by the general public; it is exclusively for use by institutional customers, such as banks, broker-dealers and corporations. Similarly, unlike bitcoin and others of its type, the blockchain undergirding JPM Coin is not public. While right now the coin can only be used for U.S. dollar transactions, JP Morgan said it theoretically could be used for transactions in any kind of currency. 

The coin is currently in the prototype phase. As the bank moves forward, it plans to actively engage regulators to explain its design and solicit feedback for necessary approvals.