By According to the Argentinian website Cripto247on, JP Morgan CIO Lori Beer reported at a press conference in Buenos Aires that blockchain will “replace existing technology” in a few years. He then went on to say that “we will see a greater and wider use of blockchain. In a few years, blockchain will replace the existing technology, today it only coexists with the current one”.
Beer clearly explained to Cripto247, that JP Morgan uses blockchain technology, to “simplify the payment process and to store customers’ information. This is directly related to the KYC (Know Your Customer) policy.”
JPMorgan Chase & Co. is the largest bank in the United States. As a financial holdings conglomerate, the company’s interest in using blockchain and Bitcoin technologies is of significance.
Beer went on to add that blockchain technology helps to prevent money laundering. She further explained that the use of blockchain by the bank, is a means to apply the technology:
“We are currently following many paths. We invented a blockchain with an open code based on Ethereum. Actual blockchain technology has not yet resolved issues with privacy and scalability that we needed. We are connected to Hyperledger and Enterprise Ethereum Alliance. The application of this technology in business is more important to us than the technology itself. We are looking not only for cost reduction, but also for opportunities to develop new products.”
Ethereum is a public, open-source, Blockchain-based platform which enabled users to build programs without the involvement of middlemen, including central servers.
Beer was also asked about JP Morgan’s position on buying cryptocurrencies. She explained that the bank only supports what is regulated and has specialists who are “evaluating what is happening” with virtual currencies. When asked about the institutional position regarding Initial Coin Offerings (ICOs), Beer preferred not to respond.
An ICO refers to the unregulated method of generating sources of funding to support a new cryptocurrency endeavor. This method assists start-ups to navigate around venture capitalists or banks when investigating sources of financial input. During the ICO period, a portion of the start-up will be sold to raise capital for its development.
Earlier in August, the Cointelegraph reported that JP Morgan Chase’s CEO Jamie Dimon was optimistic about blockchain. “[JPMorgan] is testing [blockchain] and will use it for a whole lot of things,” he said. However, in September 2017, Dimon reportedly called Bitcoin a “fraud” at an investor’s meeting, along with threatening to fire any employees trading in Bitcoin on the company’s accounts. Contradictorily, Dimon has expressed concerns around cryptocurrency causing “competition” for JP Morgan. The JP Morgan internal report has also called cryptocurrencies the “face of the innovative maelstrom around the blockchain technology.”
When speaking to the Cointelegraph in Davos in January, Dimon took a stance more similar to what he told Harvard Business review, in stating that he “can’t answer,” but also claimed that he was “not a sceptic” either.
JP Morgan Chase filed a patent for a blockchain powered peer-to-peer payments networks in May, that could be used for intra- and inter-bank settlements. The patent application proposes to use a distributed ledger to process payments in real-time, without having to rely on a trusted third party to hold the true “golden copy” of the audit trail.
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