A look into the steps JP Morgan is making in blockchain and crypto including investments, partnerships, hiring, and product launches.
In 2017, JP Morgan CEO Jamie Dimon referred to Bitcoin as a fraud and said that any JPM trader who traded crypto would be “fired in seconds.” Two years later, JP Morgan became the first major US bank to launch its own token, JPM Coin. It also became the first major US bank to offer access to Bitcoin and other crypto funds to its wealth management clients.
JP Morgan’s dramatic turnaround in its attitude towards crypto has only persisted. In this article, we use Blockdata data to uncover JP Morgan’s strategic priorities in the blockchain and crypto space highlighted by the bank’s recent investments, acquisitions, and partnerships.
JP Morgan’s evolution in the crypto and blockchain space
JP Morgan has always been on a mission to adopt disruptive trends.
“While other tech companies have a narrower scope of things they do very well, what differentiates JPMorgan Chase is our ability to invest $12 billion dollars in a broad number of technologies simultaneously. Our size and scale are simply unparalleled.” – Larry Feinsmith, Managing Director and Head of Global Tech Strategy, Innovation & Partnerships at JPMorgan Chase.
Despite being a well-established bank, JPM has always tried to be early in exploring how modern technology can impact financial services. This is evident from its investment and innovation strategy. JP Morgan’s association with blockchain can be traced back to 2015.
In initial years JP Morgan forayed into the blockchain industry
In 2015, the bank made its first effort to venture into the blockchain space by forming the R3 consortium with 8 other banks, including BBVA and Barclays.
Following that, JPM initiated a trial run for blockchain technology in February 2016 to measure its ability to deal with increasing competition from online lenders and payment systems that use blockchain and cryptocurrency. In October of the same year, the bank launched its blockchain, Quorum, a platform developed internally to be a private version of the Ethereum network.
JPM ended its engagement with the consortium in April 2017 and left R3 to pursue a separate technology goal.
JP Morgan launched Dromaius, a prototype designed to test the use of the Ethereum blockchain technology in 2018. During this time, the bank was experimenting with how blockchain could help minimize costs and ensure easier transactions within capital markets.
In 2019, JP Morgan launched the JPM Coin, a digital token representing fiat currencies (i.e., where 1 coin equals $1) using blockchain technology to transfer payments between institutional clients. The coin runs on the Quorum blockchain and is currently available to specific big institutional investors and clients with approval from JP Morgan. JPM Coin has the capability to back advanced payment types such as PvP (Payment versus Payment), DvP (Delivery versus Payment), machine to machine payments, and traditional cross-border payments. There are three practical uses of JPM Coin:
- Real-time payment transactions at any time of the day for big international corporate clients
- Secure transactions
- Allowing large corporations that use JP Morgan’s treasury services to replace the dollars they hold in subsidiaries around the world