New York (CNN Business) JPMorgan Chase, the nation's largest bank, is launching its own cryptocurrency.

Dubbed JPM Coin, the cryptocurrency has a fixed value redeemable for one US dollar. It won't trade freely like bitcoin and many other cryptocurrencies.

JPMorgan believes JPM Coin can help lower its clients' costs and risks, by making money transfers instantaneous and by reducing the amount of capital they need to hold onto. JPMorgan moves trillions of dollars around the world every day on behalf of customers.

JPM Coin is designed to be used, at least initially, by major institutional customers, not individuals, although JPMorgan expects to roll it out to a broader range of customers later this year.

JPMorgan JPM Signature Bank SBNY said it is the first American bank to create and successfully test this kind of digital coin. But, a much smaller bank based in New York, started handling transactions for its business clients on its own blockchain platform on Jan. 1. Like the JPM Coin, its transactions are pegged to the dollar, and do not use a freely traded cryptocurrency like bitcoin.

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