Stablecoins February 2020 Eddie Wen. Managing Director Global Head Digital Markets J.PMorganJPM Coin* a ‘= What is JPM Coin and who will be able to use it? 1 JPM Coin is a digital coin designed to facilitate instantaneous payments using blockchain technology. = JPM Coin will be issued on Quorum protoco-based biockchain networks to start, but support for networks based on other blockchain protocols may be subsequertly developed based on client demand. JPM Coinwill be operable on all standard blockchain networks. | Only instittional customers passing J.P, Morgan compliance requirements ( KYC) can transact with these = Is JPM Coin a currency or legal tender? = The JPM Coin isnt money per se. isa digital coin which clients can redeem for US. dollar (USD) Credited to their accounts at JPMorgan Chase NA. 1m hn short, a JPM Coin always has a value equivalent to one USD. = Over time, JPM Coin will be extended to other major currencies, subject to client demand. The product ‘and technology capabilties are currency agnostic. = What are the potential use cases in the future for JPM Coin? 1 Blockchain & DLT payments platform '™ Corporate intemal liquidity management 1 Securities Delivery Vs Payment +18 cana oteype. Feng ae wilconpe a srrpreceses ona sett areqdaryancompkancecbibsons, par sry We reckcosevesbehg bunches ns FAOON 1 J.P.MorganHow JPM Coin* works Simplified ilustrative Example Stop 1: Coin Issuance Stop2: Coin Transtor ‘Step 3: Coin Redemption JPA co Holders ofJPA Coie rede tem fr USD at blocten {IP. Worgan Chase Bonk reohng eedto 2 deposit rewtather JP. Merge “JP coins 2 ripe, Morgan wilconpt al ral procatres an sty legit anconplane cigars, rr ary ho poss or seve bong uch uleng JPM Cin 2 JPMorganAglobally consistent taxonomy for privately issued stablecoins is critical 1 Designed tominimizeeliminate vlaity Inherent in exstingeryptocisrencies 1 May be pegged torea-word assets (.g. Flt) or controled by ‘lgothmic monetary pcy’ 1 Most common use to improve the eciency of payments systems Could be used for wholesale or etal paymas ly eer a Peery re ko ey ican Only sset Pool On! ‘Asset Pool + Clair {(rogulatory capital requirements apply) ‘Aeest ool Only 1 Dott preston cuter caesrone bake + Onwfrara backig wh Sepia 0 sig ft corey tice Sl fsa hich cob a Bank orn hay Corer) aan eset ype ‘unc nettton 1 Vale esonton teen idneaeaeks ear kennel mate ops bycam ones so mat selue of asset poo fal below par -nyorens con, Conus Ba Dp Curr neta a oneton JPMorganCore principles should guide regulation and oversight of digital assets, including stablecoins Activities-Based Minimum Standards for Globally Consistent Ongoing Regulatory Regulation DLT networks. Oversight Engagement 1 Digital assetsor her m Blockchain networks, er = coherent. globally 1 Gaon the rapid paco of products in inane cther DLT, engaging in. consitontappreach to __—technelgeal change, rmarkals that result fom nancial sendces the oversight and regulators and market the use of new activities should moet ‘supenison ofblockchain participants should techrolgles, shouldbe certain minimum forDLTbased actuty wil coninualy engage to subject to actos: Standarés to promote fa, minimize regulatory ensure that consistent based eguaton, and efectne, and efcient ‘ritrage opportunites understanding of atest ‘rsh to ensure systems snd reduce ‘nd encourage evelopments leads to consumeriniestor systemic isk Innovation, appropiatly-alrated protection athe reduction of systemic ek iersight of imovate technclagies in nsniat serdoes, Nowak, lodge, ane patcipant securty are key elements tothese standards, 4 JPMorgan5 ter Se acme mae eT ge HE Pa ee cna hart