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JP Morgan files for anonymous online payment system

Bitcoin
Image caption A US Senate committee hearing was told in November virtual currencies such as Bitcoin were a "legitimate financial service"

US bank JP Morgan Chase has filed for a patent in the US to develop a payment system using "virtual cash", similar to the emerging online currency, Bitcoin.

JP Morgan said that, like Bitcoin, the features of the electronic system would let users make payments "completely anonymously".

It added that users would not have the "expense of today's wiring fees".

But in its application, the bank said traditional credit cards would dominate for "at least the next five years".

The bank noted: "None of the emerging efforts to date have gotten more than a toehold in the market place and momentum continues to build in favour of credit cards."

Analysts say the move comes as banks, credit card companies and online payments firms such as PayPal are trying to gain dominance as people make more of their financial transactions online.

JP Morgan's patent application comes after China banned its banks from handling transactions involving Bitcoins.

China said Bitcoin was not backed by any nation or central authority.

Bitcoin's price has more than trebled in value since October.

It increased further in November, when a US Senate committee hearing was told virtual currencies were a "legitimate financial service", with the same pros and cons as other online payment systems.

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