JPMorgan's Balancing Act between Blockchain and Crypto


The multinational investment bank JPMorgan Chase has had a chess report with cryptocurrencies over the years. Although it has maintained an apparent apathy towards Bitcoin and the like, the financial institution has openly adopted blockchain technology and is actively using it in various internal projects.

This came to the fore in August 2018, as information manager Lori Beer made a bold statement in an interview, claiming that blockchain technology will "replace" existing financial systems in the next years.

The beer's feelings come at an interesting time, especially considering JPMorgan's yin-yang attitude towards decentralized register technology (DLT).

Blockchain technology is the basis for the existence of cryptocurrencies, which have multiplied in number and applications since Bitcoin was born in 2009. Therefore, it is worth a leap of memory to understand the juxtaposition between 39; attitude of the company towards cryptocurrencies and blockchain technology.

The love / hate relationship of JPMorgan with crypto

How it was In the case of most financial institutions, the emergence of cryptocurrencies has encountered a certain element of trepidation. Some have accepted more than others, but JPMorgan has had one of the most interesting stories to tell.

The company has not been excessively opposed to the notion of cryptocurrencies, but its leadership – in particular CEO Jamie Dimon – has been nothing short of hypocritical in recent years. As we delve into, this has caused a conflicting narrative in terms of projects and exploits of the company in space compared to Dimon's opinions.


In November 2016, JPMorgan published a white paper for Quorum, which is a private blockchain platform built on the Ethereum protocol.

As a founding member of the Enterprise Ethereum Alliance (EEA), JPMorgan's Quorum development is aligned with the mandate of the AEA, which aims to provide privacy, scalability and security to the Ethereum blockchain. It is aimed directly at companies that want to control the accessibility and use of data through a blockchain system.

The Quorum blockchain seeks to provide data privacy to businesses, using the Ethereum network to validate transactions, described in the initial paragraph of the white paper:

"Although the design is simple, the solution preserves many of the key attributes of Ethereum, how to ensure that every node in the network participates and increases the overall security of the entire network while disclosing only the details of private transactions to those participating in the transaction. "

Quorum uses cryptography to protect confidential data, allowing only those who have the necessary permissions to access certain transaction data.

Nearly a year and a half later, on April 20, 2018, JPMorgan finally tested the Quorum blockchain with a number of high profile banks participating.

JPMorgan is also considering the divorce of the Quorum from the co mpany, in an attempt to make the platform more accessible to the markets. A barrier to entry is the fact that competitors on the market are unlikely to use a platform operated by a competing bank.

Topsy-turvy 2018

While the cryptocurrencies suffered a humiliating correction in the months following the historical maximum of Bitcoin December 2017, JPMorgan – among other banks – interrupted the processing of cryptocurrency purchases with its cards of credit, citing the volatility of the markets.

By the end of February, the bank has delivered its annual report to the United States Securities and Exchange Commission (SEC). . The report added cryptocurrencies to its sections on "Risk Factors" and "Competition", illustrating the destructive aspects of space.

The company told the SEC that the emergence of cryptocurrencies would have forced the bank to spend more by adapting its products to appease customers and customers, with the possibility that the bank will end up losing market share:

"Both financial institutions and their non-bank competitors risk that the processing of payments and other services may be interrupted by technologies such as cryptocurrencies that require no intermediation."

In May 2018, the company announced the creation the position of a head of the cryptographic resources strategy at the company. The place was immediately filled, with Oliver Harris the man in charge of leading the company's new cryptocurrency projects. It is understood that Harris's position would not involve the exchange of cryptocurrencies, but rather the investigation of the use of cryptocurrency and blockchain services that could benefit JPMorgan processes.

Around the same time, Vice President Daniel Pinto said the company was examining the Bitcoin Space – admitting the interest in futures markets in an interview with CNBC. Pinto went so far as to say that they would have erased Bitcoin futures if they were to do so, saying that cryptocurrencies faced a series of challenges:

"I have no doubt that in one way or another, technology will play a role. [Regarding Bitcoin] you can not have something in which the business proposition must be anonymous and be the currency for unknown activities.It will have a very short life because people will stop believing it or regulators will kill it.I think the concept is valid [and that’s why] in many central banks are examining in. The tokenisation of the economy is real to me, cryptocurrencies are real but not in their current form. "

Jamie Dimon

JPMorgan CEO Jamie Dimon has long been time a tough critic against Bitcoin and cryptocurrencies. Dimon's dissenting attitude dates back to 2015, when he said that the Bitcoin would be stopped and that the blockchain "is like any other technology". Furthermore, Dimon made it clear that the bank would use the underlying technology to improve its systems:

"If it is cheaper, more efficient, more efficient and safer then we will use it." The technology will be used and could be used to transport currency, but it will be dollars, not the Bitcoins. "

Bitontoin's most infamous criticism of Dimon arrived in September 2017, when he labeled cryptocurrency as a fraud. JPMorgan's CEO even threatened to dismiss employees who offered cryptocurrency trading on behalf of their clients.

Dimon's comments on the subject faded and flowed in the following months, as his views on the industry were apparently in disagreement with the company's plans. Dimon came to say that he would not comment on Bitcoin anymore, with JPMorgan adopting an open minded & # 39; to cryptocurrencies.

In view of the launch of the first Bitcoin futures contracts in December from the Chicago Mercantile Exchange, the company also considered facilitating access to trading futures.

JPMorgan's global market strategist Nikolaos Panigirtzoglou promoted the divergent views between the company and its CEO, writing in a note to investors that the launch of Bitcoin futures would drive the legitimacy of cryptocurrency:

"The potential The launch of future Bitcoin futures by established exchanges has the potential to add legitimacy and thus increase the attractiveness of the cryptocurrency market for both retail and institutional investors. "

Dimon apparently changed his music in 2018, saying he was not interested in the topic in a January interview, while admitting he regretted his "frauds" in 2017.

A few weeks later At the World Economic Forum in Davos, Dimon told Cointelegraph that he "was not skeptical" about cryptocurrencies.

After a number of months out of the spotlight, Dimon made headlines this month, he reportedly called Bitcoin a "scam", before reiterating that he was not interested in the subject during a gala speech.

Dimon had said that the government would move to close the cryptocurrencies due to lack of control over space. This followed an interview with the Harvard Business Review, in which Dimon said that JPMorgan was testing blockchain technology for use in a wide range of applications within the company.

Winds of change

Dimon's claims on the title have somehow taken off the work is being done at the global financial institution.

As mentioned earlier, CIO Lori Beer of the company has painted a more accurate picture of the company's position on blockchain technology and cryptocurrencies.

His statements about the imminent adoption of the blockchain and the effect will not be underestimated and will appear to be a major driving force in the JPMorgan Quorum project.

As Beer said, the company needed to create a blockchain platform that served the needs of the company and its many customers:

"We are currently following a lot of paths and we have invented a blockchain with a code Open based on Ethereum: Effective blockchain technology has not yet solved the privacy and scalability issues we need – we are connected to Hyperledger and the Enterprise Ethereum Alliance – the application of this technology in business is more important to us We are looking not only for cost reduction, but also for opportunities to develop new products. "

The IOC also said that JPMorgan is" assessing "the current state of the cryptocurrency space, while making clear that it would only be supported markets and currencies.

Although this does not make the company closer to being actively involved in the cryptocurrency markets, its appetite for blockchain development says a lot about the underlying technology and the promise it has for the financial world. [19659044] window.fbAsyncInit = function () {FB.init ({appId: & # 39; 1922752334671725 & # 39 ;, xfbml: true, version: & # 39; v2.9 & # 39;}); FB.AppEvents.logPageView (); }; (function (d, s, id) {var js, fjs = d.getElementsByTagName (s) [0]; if (d.getElementById (id)) {return;} js = d.createElement (s); = id; js.src = ""; fjs.parentNode.insertBefore (js, fjs);} (document, & # 39; script & # 39 ;, & # 39; facebook-jssdk & # 39;)); [ad_2]Source link