JPMorgan’s ‘bitcoin killer’ – the complete lowdown

Despite a source familiar to the matter claiming JPMorgan Chase does not have plans to introduce a competing online currency product, the international press has been awash with stories focusing on the leading lender’s ‘bitcoin killer.’

Digital currencies – a much published alternative to the cash currencies organised and managed by banks and nations – have taken the world by storm.

Created in 2009, bitcoin is arguably the most famous, and has been written about endlessly in this year’s newspapers.

As an independent electronic currency, its progress in today’s market has been fast-paced, having first prompted international scrutiny as the favoured currency to purchase illegal goods on the Silk Road website before eventually being given the go ahead by some of the world’s largest nations and businesses.

However, JPMorgan’s patent application does not mention bitcoin by name.

The source stated the biggest U.S. bank by assets doesn’t have anything in development nor does it plan to produce virtual currencies to compete with bitcoin.

Instead, as The Financial Times reported earlier this week, the American patent application was created for a system which enables users to pay for goods and services electronically without fees and without using names – just in a very similar way to bitcoin.

Recent renewal

According to a U.S. Patent & Trademark Office document, the application is an intellectual property claim renewal first filed back in 1999.

The patent, which covers a method for guiding “financial transactions over a payment network,” includes the following core services:

  • Digital wallets.
  • Payment software which would work alongside a customer’s internet browser to automically complete sensitive forms with personal information.
  • The lender’s so-called Internet Pay Anyone Account – meaning a customer can transfer money to anyone anonymously as easily as sending an email.
  • An online private lockbox – a kind of online bank account which can only take funds in, and therefore negate the worry that somebody would be able to take funds out.


Whilst The Financial Times source said the patent has not been renewed to become direct competition with bitcoin, the latter was likely part of the impetus for its renewal.

Yet alongside this, the patent does explicitly state one of the reasons for the renewal – that today’s financial system is outdated.

In the patent application, JPMorgan notes two trends in the patent application which means the traditional banking systems are becoming obsolete.

The first is the fact that merchants are beginning to establish direct relationships with their customers, and the other is that online products are often sold in small batches which do not warrant the high price that each transaction currently costs.

The patent application therefore states a new market has arisen for “low dollar, high volume, real-time payments with payment surety for both consumers and producers.”

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