There is more to Blockchain Innovation : JP Morgan

JP Morgan on Blockchain Innovation

JP Morgan Chase & Co.’s (JPM) distributed ledger venture, Quorum, recently made news when its head, Amber Baldet, moved on to start her own venture. But her shoes are filled in by Christine Moy.

Christine Moy started her career in the middle office of JP Morgan’s syndicated loans business. In this job, Moy had to deal with all the documents that needed to be signed before these transactions could close. She then spent over a decade working across a range of assets and divisions at the bank. This cross-training included witnessing how securities and chains of custody were frozen solid as the 2008 crash engulfed the entire financial system. That experience underscored for her the importance of a transparent system of reconciliation just as the syndicated loans role drove home the need for faster settlements. With all this insight she was the first choice and new program lead for the Blockchain Centre of Excellence (BCOE) at JP Morgan.

Moy has stressed the importance of interoperability between various blockchain networks. Blockchain’s cost efficiency will suffer unless the multiple silos that comprise a bank’s financial system remain intact. These silos can take the form of different technologies or protocols for a system that result in lack of communication between the two. So she wants all the public and private blockchains to be interlinked. But many people are opposed to this as they want separate block chains.

She was policy neutral and has said that irrespective of the blockchain that JP Morgan is using they are happy that they are working closely to Ethereum . Quorum, is a private blockchain, the ethereum-based, open-source project that had been the cornerstone of the JP Morgan’s blockchain work built with open-source code, the kind that was in trend a few years ago when enterprises were keen to experiment with the technology but wanted nothing to do with any cryptocurrency. JP Morgan was considering a spin-out of Quorum.

Everybody in the industry thought it was the end of Quorum as JP morgan is spinning of the project but the spin of was just to increase JP morgan’s investment in the project and as such products required constant support of the company like RedHat supports Linux users. This was JP Morgans way of spreading the wings into Software support by hiring more Business Analysts and Engineers in their company.

The Quorum, which may be spun out into a separate company of its own, recently Moy invested it it by automating the delivery of a $150 million Yankee certificate of deposit using ERC-20 tokens on its platform. This means that investors received the certificates only after they deposited the required cash. The successful execution of contracts may just be the beginning. The Quorum expects to fulfil these contracts by using Smart contracts to make them fast transactions.

Currently a whole host of entities picked up Quorum and started using it, IHS Markit, Broadridge, Synechron, ING, and BlockApps to name a few. JP Morgan has other blockchain projects too such as its collaborations with Digital Asset Holdings, Axoni and Nivaura.

Moy also sees the Yankee CD trial as a harbinger of a more open and transformed financial system.

“This is an example of us issuing a traditional financial instrument natively on the blockchain,” Moy said. “But the next phase is when you have real asset managers participating in a product like this; it’s about, what does custody look like? What does fund administration look like – and what does a trades market look like for something like this?”

Conclusion:

JP Morgan banks for adopting a “wait and see” approach to growing innovation from Quorum and other blockchain products with the trust that it will be the next big thing in market.

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