- JP Morgan says the blockchain will reduce costs and improve security.
- The bank is building a blockchain in open-source Ethereum.
- JP Morgan still calm on cryptocurrency trading, awaiting settlement.
He is almost a CEO of JP Morgan Jamie Dimon famously called bitcoin a "fraud" and threatened to dismiss anyone in the company to trade 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 his potential to reduce transaction times for global payments.
Blockchain: one of the three main priorities of JP Morgan in 2018
According to Chief Information Officer (CIO) Lori Beer, however, blockchain is not just a potential technology, it is a priority.
Speaking at a press conference in Buenos Aires, Beer said the blockchain is one of the bank's three focal points, along with intelligence and APIs.
Beer says technology will help them "simplify payment processing and store customer information." Also cites its potential to strengthen Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) rules for sending money between banks.
Building on Ethereum
JP Morgan is experimenting on Ethereum, having launched Quorum at the start of this year to facilitate the use of smart contracts.
"We invented an open source blockchain Ethereum, the existing blockchain technology had not solved the problem of privacy and scalability we needed."
As a bank that handles millions of transactions every day, JP Morgan will probably have need a blockchain solution that can handle high speed transactions.
Is the blockchain the future for JP Morgan?
Beer was extremely bullish about technology, explaining that it is not just about cost reduction. He said they are also looking for "opportunities for new product development."
The long-term goal is a complete overhaul of the system:
"In a few years, blockchain will replace the existing technology."
Regarding the purchase and trading of cryptocurrencies?
Although beer was evangelical about blockchain technology, it was more cautious about trade.
He said he had "specialists evaluating what is going on" and will only support regulated activity.
It appears that JP Morgan is adopting the same "watch-and-wait" approach as other Wall Street banks.
84% of companies are "actively involved" in blockchain
According to a new PwC survey, it seems that JP Morgan is not the only one. The vast majority of companies are jumping on the blockchain bandwagon.
The survey interviewed 600 executives in 15 territories. 84% confirmed experimenting with blockchain technology.
The report concludes: "Everyone talks about blockchain and nobody wants to be left behind."
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