- JP Morgan says blockchain will reduce costs and improve security.
- The bank is building a blockchain in open-source Ethereum.
- JP Morgan still quiet on trading cryptocurrencies, waiting for regulation.
It’s almost a year since JP Morgan CEO Jamie Dimon famously called bitcoin a “fraud” and threatened to fire anyone in the company for trading it.
Now the bank is building its own blockchain.
In fairness to Dimon, he has since rolled back his comments and said “the blockchain is real.” He praised its potential to reduce the transaction time of global payments.
Blockchain: one of JP Morgan’s three main priorities in 2018
According to Chief Information Officer (CIO) Lori Beer, however, blockchain isn’t just a potential technology, it’s a priority.
Speaking at a press conference in Buenos Aires, Beer said blockchain is one of the bank’s three main focuses, alongside artificial intelligence and APIs.
Beer says bth technology will help them “simplify payment processing and store customer information.” She also cites its potential to strengthen Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) rules when sending money between banks.
Building on Ethereum
JP Morgan is experimenting in Ethereum, having launched Quorum earlier this year to facilitate the use of smart contracts.
“We invented a blockchain in open source Ethereum, the existing blockchain technology had not solved the issue of privacy and scalability that we needed.”
As a bank dealing with millions of transactions every day, JP Morgan will likely need a blockchain solution that can handle high transaction speeds.
Is blockchain the future for JP Morgan?
Beer was extremely bullish on the technology, explaining that it’s not just about cost reduction. She said they’re also looking for “opportunities for the development of new products.”
The long-term goal is a complete overhaul of the system:
“In a few years, blockchain will replace the existing technology.”
What about buying and trading cryptocurrencies?
Although Beer was evangelical about blockchain technology, she was more cautious on the subject of trading.
She said they have “specialists evaluating what is happening” and they’ll only support regulated activity.
It seems JP Morgan is taking the same ‘watch-and-wait’ approach as other banks on Wall Street.
84% of companies are “actively involved” in blockchain
According to a new PwC survey, it appears JP Morgan are not alone. The vast majority of companies are jumping on the blockchain bandwagon.
The survey polled 600 executives in 15 territories. 84% confirmed they are experimenting with blockchain technology.
The report concludes: “Everyone is talking about blockchain, and no one wants to be left behind.”
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