Several Argentine banks are reportedly testing JPMorgan’s JPM Coin to make settlements faster and improve back-end banking operations. The pilot remains in its early phase and is centered on using blockchain technology behind the scenes to improve the way banks settle and reconcile funds.
Local outlet iProUP reported on Monday that the pilot began with a small group of institutions, and Banco CMF is one of the confirmed participants.
The project is still in its testing stage and does not involve real money transfers for now. Instead, the banks are carrying out trial transactions through traditional settlement rails while also recording them on a blockchain ledger.
This allows them to see whether the technology can actually make reconciliation faster and reduce operating costs, without exposing themselves to financial risk.
CMF CIO Maximiliano Cohn said the goal of this first phase is to confirm whether settlement and reconciliation between participating banks can be improved.
“While the concept is in the design phase, the goal is to implement a DLT (distributed ledger technology) to reduce costs, improve speed and operational efficiency,” he adds.
Put simply, the banks want to see if blockchain can improve internal banking operations without affecting the customer experience.
How JPM coin works and why banks care
JPMorgan announced last November that the institutional clients could start using JPM Coin after it finished a proof-of-concept on Coinbase’s layer-2 network, Base.
Unlike Bitcoin, JPM Coin is not a public cryptocurrency that anyone can use or trade freely. It is a permissioned deposit token built for banks and large financial players.
Each token is backed one-to-one by U.S. dollars held in reserve, which helps keep its value stable.
This allows institutions to move funds on blockchain networks much faster, without the delays often seen in traditional cross-border payment systems. In January, JPMorgan took the next step by working with Digital Asset to expand JPM Coin to the Canton Network.
For banks in Argentina, the reason for testing it is fairly straightforward. The country has dealt with high inflation and strict currency controls for years, so faster and more efficient dollar settlement is especially important.
By trying out JPM Coin, these banks are looking at ways to improve back-end processes that still depend on older and slower systems.
Blockchain can help by giving all parties access to the same shared record of transactions. That can reduce the need for manual checks, lower the risk of errors, and shorten the time it takes to settle funds between banks.
“Considering that the regulator is moving forward with initiatives that will allow the use of crypto assets, more precisely stablecoins, it can be a great tool for real-time cross-border payments, provided that economic and financial policies do not generate mismatches in hard currencies,” Cohn adds.
Pilot focuses on internal banking infrastructure
For now, the project is expected to stay within a closed network made up of the participating banks.
According to Cohn, the process will take place in a closed loop only between participating institutions, with the “main objective of having a shared debt registry with the power of on-chain.”
He added that assets are expected to be gradually tokenized and later integrated with smart contracts.
The report also mentioned that other banks, such as Galicia, BIND, and Comafi, may be watching the initiative or considering involvement, although their participation remains unconfirmed and was described as market speculation.
Crypto restrictions still remain in place
The tests are happening even though Argentina’s central bank still restricts banks from offering crypto-related services to customers.
In 2022, Communication “A” 7506 blocked financial institutions from carrying out or supporting client transactions involving digital assets.
Even so, iProUP noted that the current rules do not stop banks from using blockchain technology for their own internal operations.
That distinction is important. The reported JPM Coin pilot is not about giving retail customers access to crypto trading. It is mainly focused on improving the infrastructure banks use behind the scenes.
If the trial delivers results, it could give Argentine banks a faster and more efficient settlement process and help them get ready for a future where tokenized financial infrastructure plays a bigger role.
Moreover, Argentina has recently tightened its grip on crypto platforms. As part of this move, the country has blocked the crypto-based prediction market platform Polymarket nationwide.