Jamie Dimon has made no secret of his skepticism about bitcoin, but he has given the technology behind it the sincerest form of praise: investment.

Under his leadership, New York-based JPMorgan Chase developed a variant of blockchain — a secure ledger with worldwide accessibility that has been used to generate cryptocurrency — then leveraged it to create not only the Interbank Information Network, a data-transfer service that can speed up payments, but its own digital coin.

"Exchanging value, such as money, between different parties over a blockchain requires a digital currency," explained Umar Farooq, the company's head of digital treasury services.

The prototype token the bank created to meet that need and successfully tested this month isn't money in the traditional sense, Farooq added. Dubbed JPM Coin, each one represents a single U.S. dollar.

When one client wants to send money to another via blockchain, the amount would be converted to JPM Coin for transfer, then converted back to dollars in the recipient's account, reducing the normal settlement time, the bank said.

Before introducing the product to clients, JPMorgan will seek feedback from regulators and obtain any needed approvals. The lender's goal is to use JPM Coin to transfer money between businesses; there are no plans so far to offer it to individual customers.

The token's development and the possible demand for it highlight the potential for blockchain, which financiers have argued has the potential to transform the industry, reducing the duplicate services and costs required for potentially numerous parties in a single transaction to keep their own separate books.

The fact that the token isn't currency in its own right differentiates it from bitcoin, which Dimon famously said in 2017 was in the midst of a pricing bubble comparable to Dutch tulips in the 17th century and dot-com companies in the turn-of-the-millennium U.S.

Nouriel Roubini, the New York University economist who predicted the 2008 financial crisis and was nicknamed “Dr. Doom,” echoed that assessment in Senate testimony last fall.

Bitcoin and cryptocurrencies like it that don't exist outside cyberspace have suffered rapid price fluctuations and represent "the mother of all scams," he told the chamber's Banking Committee.

For money to have value, only so many currencies can operate alongside each other in the same market, Roubini said. Otherwise, it becomes increasingly difficult, if not impossible, for consumers to determine the value of goods and services.

The idea that hundreds of cryptocurrencies could viably operate together "contradicts the very concept of money," Roubini added. "Their supply is created and debased every day by pure fiat and in the most arbitrary way. So cryptocurrencies are creating crypto money supply and debasing it at a much faster pace than any major central bank ever has."

As a result, cryptocurrencies have drawn the attention of Trump administration officials from Treasury Secretary Steve Mnuchin to Securities and Exchange Commission Chairman Jay Clayton, who worried that investors didn't understand what they were buying and that the products could undermine financial stability.

Trading in cryptocurrencies was banned in 2017 by regulators in China who pointed to concerns about maintaining "economic and financial order," and JPMorgan's Dimon predicted other countries would do the same.

Establishing a sovereign currency is one of the first actions that new governments take, and none are likely to stand idle while a competitive money supply they don't control grows large enough to pose a threat, he said.

