Category Archives: JPMorgan

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JPMorgan Chase Patents Blockchain Technology For Tracking Auto Dealer Inventory

JPMorgan Chase, a financial powerhouse with assets in excess of USD 2.76 trillion, has patented a blockchain-based technology that facilitates a distributed ledger version of floorplan lending.

Essentially, floorplan lending allows auto dealers to put up their car inventory as collateral for a revolving line of credit. However, this can be an arduous process for the bank, since agents have to be physically sent to auto dealerships to verify the collateral. Also, sometimes auto dealers pledge a car as collateral to one bank while pledging the same car as collateral to another bank as well. This is called ‘double flooring’, and whether this is intentional fraud or an accident, it can cause unexpected losses for banks.

JPMorgan’s patent proposes using the Quorum blockchain to store the vehicle identification number (VIN), as well as information from a range of sensors on the car including geolocation. This will not only cut costs since a physical agent will no longer be necessary to verify that the car is there but also if all of the banks cooperate and use the same blockchain, then this system has the potential to completely eliminate double flooring.

This is the first time that JPMorgan’s Quorum blockchain has moved beyond abstract financial operations. Previously Quorum had been primarily used for issuing debt and linking bank networks.

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JPMorgan Coin Gets Blockchain Reboot

JPMorgan Coin Gets Blockchain Reboot

A report today claims that JPMorgan Chase has rebooted the underling blockchain of it its prototype cryptocurrency, JPM Coin, following six month long efforts from technologists in London, Singapore, and the US.

JP Morgan’s private version of the Ethereum blockchain, Quorum, has had an overhaul of its privacy features in an effort to make the technology suitable for use by a wider selection of firms. This ambition has also been pursued through JP Morgan’s partnership with Microsoft Azure, which Quorum head Oli Harris has said is also a stepping stone for offering a corporate spin-off of the software project.

The behind the scenes updates to Quorom have focused specifically on re-writing its privacy layer, Constellation, replacing its current language Haskell with Tessera. Tessera operates a similar design but is built in Java, making it more accessible for businesses to deploy.

Harris told CoinDesk the engineering collaboration between JPMorgan and Microsoft should enable the bank to focus on the potential business applications of the technology, while Microsoft can ”[deal] with a lot of heavy lifting.”

JPM coin was launched in February this year, with JPMorgan being the first major US bank to create its own digital currency.

 

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JPMorgan Inspired But Worried About China Fintech

JPMorgan Inspired But Worried About China Fintech

A recent expedition by JPMorgan Chase & Co executives to China to conduct business reconnaissance of their financial technology (fintech) has resulted in mixed feelings of inspiration and worry, according to the consumer bank’s CEO Jamie Dimon.

In a letter distributed to shareholders last week, Dimon outlined the vast progresses made by Chinese banking firms in fintech, claiming that the evidence had spurred top brass to act even quicker on innovation measures:

“It’s hard not to be both impressed and a little worried about the progress China has made [with artificial intelligence and fintech]… It made our management team even more motivated to move quickly.”

During the China trip, the team paid visits to companies that could open accounts almost immediately with machine learning, and firms that could pay out claims in a few ours with just smartphone images.
Dimon is a long-time advocate of investing in innovation, in 2017 dubbing technology “the greatest thing that has ever happened to mankind”. Bloomberg reported in February that the bank would boost its annual tech budget to USD 11 billion, including to research machine learning.
However, Dimon has not always taken kindly to cryptocurrency and blockchain, criticizing Bitcoin often in past yeas. He has seemingly changed his mind, backing blockchain last year. JPMorgan Chase itself has been stirring in the crypto scene, with its quiet launch of JPM Coin in February targeting institutions.

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World Bank Says DLT Can Drive Cross-Border Payments

World Bank Says DLT Can Drive Cross-Border Payments

A senior financial specialist at the World Bank has released a paper which claims that distributed ledger technology could help bring down remittance costs and improve cross-border payments compliance.

The World bank blog also states the “industry is ripe for disruption“, citing DLT as being well positioned to make its mark. The post was written by World Bank senior financial sector specialist Marco Nicoli along with Rodrigo Mejia-Ricart, research and public policy analyst at the United Nations and Camilo Tellez, head of research and innovation at the Better than Cash Alliance. The post criticizes current traditional B2B cross-border payments as being too slow and points out the faults quite succinctly:

“Moving funds through the current corridors requires transferal through the relevant domestic payment systems, which often have different operating hours and are located in different time zones… For certain corridors, the funds must be routed through several banks and intermediaries before they reach their destination, leading to higher fees and slower payment settlement.”

There is a multitude of options operating within the payment space, making it hard for DLT to find a position which users trust, tied for years to traditional systems, and dependent on them despite their pitfalls. The paper suggests that cost, one major burden for users of current payment systems, could be reduced if existing companies followed models such as Ripple, Circle, Swift, Visa, and JPMorgan, who are all active within the space, and currently bringing new innovations to the cross-border payment sector.

One major area of concern which was seen as a hurdle to the take up of DLT in this sector was a general distrust of such solutions due to industry concerns and misunderstanding regarding the nature of cryptocurrency, borne from the same technology.

Other concerns were raised on the subject of bringing DLT into direct competition with established CBP systems such as security, governance rules for protocols, recourse mechanisms for users, privacy, and scalability.

 

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It’s On, Off, On again: Is Barclays Ringing the Changes with a Crypto Trading Desk?

It's On, Off, On again: Is Barclays Ringing the Changes with a Crypto Trading Desk?

With Barclays investing in the preliminary assessment of a cryptocurrency trading desk, the British multinational investment bank has shown that it hasn’t quite shrugged off the lure of crypto trading.

The bank has been skirting cryptocurrency for some time now. In April 2018, it entered the blockchain arena, with Barclays UK announcing a new ventures unit to study “disruptive technology”.

This was driven by Barclays UK Ventures unit with an aim to “develop new customer propositions around major areas of disruptive technology”.  A month later, rumors began to emerge that that Barclays was monitoring client responses to the possibility of opening a trading desk for cryptocurrencies, although the bank suggested it was simply monitoring the space.

Months later, the former head of trading at Barclays was given a new position as Head of Digital Assets Project: Barclays Investment Bank, while the director of oil options trading at the bank, Matthieu Jobbe Duval became Digital Assets Trading – Consultant at Barclays. This prompted investors to expect a statement, which never came.

Blockchain has never been far from Barclay’s development plans and the bank has become an active promoter in the fintech sphere, recently hosting the Blockchain Interoperability Hackathon at the Barclays Rise fintech hub in London.

Clearly this latest assessment by the bank shows that they still have one eye on the space and the needs of its customers; needs which have also been expressed by JPMorgan clients recently. Rumors also abound that Goldman Sachs is considering hiring for a cryptocurrency trading team.

Like its counterparts across the pond, Barclays still appear to be very much in the game.

 

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EU-Regulated Bank Frick Launches DLT Markets for Institutional Investors

EU-Regulated Bank Frick Launches DLT Markets for Institutional Investors

One of the European leaders in blockchain banking, Bank Frick, announced last week that it will be starting up a subsidiary service to provide a secure environment for institutional investors to trade in digital assets.

The bank said it is introducing a digital asset marketplace dubbed DLT Markets with the regulatory properties of the traditional financial market. It will provide institutional investors with professional access to cryptocurrencies being traded on multiple exchanges.

CEO of DLT Markets Roger Wurzel said:

“We are creating a unique market offering for institutional investors in the area of the new digital token asset class. With our fully regulated platform, we are driving professionalism with regard to the trading of digital tokens and cryptocurrencies.”

This appears to be the second blockchain-related initiative of the bank, following the recently established Distributed Ventures AG – a subsidiary tasked with promoting and financing fintech and blockchain start-ups – the bank clearly wants a stake in the future digital assets market, as CEO of Bank Frick Edi Wögerer explains: “In establishing The DLT Markets AG, we are significantly building on our leading position in the area of regulated blockchain banking.”

Evidently, the digital asset ecosystem has become a gold rush for institutional investments and while regulatory framework and a secure custody solution may be holding some back, many financial service operators are seeking for ways to stake a place in the emerging market.

Bank Frick is a private bank based in Liechtenstein with a branch that operates in the UK. It has nearly two decades of financial service experiences offered to intermediaries such as fiduciaries, asset managers, payment service providers, and fintechs. Its services include custody of crypto assets, and as per the statement, the bank supports initial coin offerings. Earlier in February, it announced an official partnership with blockchain advisory AmaZix, as part of a drive towards mainstream adoption in blockchain banking services.

Many other financial institutions are participating in the blockchain economy.

Fidelity Investments, with over half a century’s worth of experience in the financial market, whose recent valuation was estimated to be worth USD 2.46 trillion in asset under management (AUM), has launched crypto subsidiary Fidelity Digital Asset Services to provide institutional grade crypto asset custody and cryptocurrency trading services. More so, a deadline has been set for March for the release of its Bitcoin custody solution.

Also, US investment bank JPMorgan recently launched its own JPM Coin, a digital coin backed by the US dollar meant for internal money settlements between its clients. Although it may have received many criticisms from crypto enthusiasts, the gesture remains one of clear certification that blockchain and its underlying asset classes are revolutionary to the traditional financial marketplace.

Last year, top cryptocurrency exchange Binance announced that it was adding a sub-account feature to attract institutional investors. US-centered crypto exchange Coinbase also launched its over-the-counter (OTC) trading service for institutional investors. And most recently, New York-based digital asset management firm Grayscale Investstment LLC reported an increase in the number of institutional investors making up 66% of its portfolio under management.

Certainly, it’s turning out to be a bouquet of institutional grade digital investment niche, and with so many to choose from, the industry will perhaps be the replacement venture to traditional finance as many have speculated it to be.

 

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Ripple’s Brad Garlinghouse Slates JPMorgan’s JPM Coin as Lacking Innovation

Wall Street banking giant JPMorgan’s announcement of its new stable coin JPM Coin, has Ripple’s boss Brad Garlinghouse criticizing its “closed network” lack of innovation.

JPMorgan says it sees potential in using digital coins to reduce risk and enable instant transfers, despite JPMorgan’s chief executive Jamie Dimon criticizing Bitcoin since it emerged as the industry’s flagship cryptocurrency.

The bank says it has always “believed in the potential of blockchain technology”. “We are supportive of cryptocurrencies as long as they are properly controlled and regulated,” says Umar Farooq, JPMorgan’s head of Digital Treasury Services and Blockchain. The new JPM coin will be transferable between client accounts at the bank, who will then be able to redeem them for US dollars pegged at parity with the coin.

With the arrival of JPM, the volatility of Ripple’s XRP is brought into question and certainly draws obvious comparisons, to which Garlinghouse has reacted by saying there is nothing innovative about JPMorgan’s final arrival into the cryptocurrency space, arguing:

“As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO.”

His comments very much echo the sentiments illustrated in an article he wrote two years ago called “The Case Against BankCoin,” in which he argued that banks should be using XRP as the obvious independent digital asset, claiming they offered “universality” which bank coins did not:

“It goes back to the fundamentals of what makes digital assets unique and special – they’re universal currencies, meaning anyone can use them as units of value anywhere in the world. That universality gives digital assets global reach and the ability to settle much faster than traditional assets.”

Clearly, Ripple’s executives would argue that users of XRP also has the added option to speculate, holding on to the currency in the hope of trading later at a higher value; compared to bank coins which will only have a fixed settlement value based on parity with the US dollar.

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JPMorgan Introduces Its Own Digital Coin With Institutions in Mind

JPMorgan Introduces Its Own Digital Coin with Institutions in Mind

Major US-based multinational investment bank JPMorgan announced yesterday that it has launched a digital coin that will be backed by the US dollar.

A major breakthrough for cryptocurrencies which had for a long time been blighted in some circles as being untrustworthy, or so would some think. As a matter of fact, JPMorgan was among those in 2017 who ridiculed cryptocurrency and specifically called Bitcoin a fraud. Although its perspective on the subject of blockchain industry as well as properly controlled and regulated cryptocurrencies was that it held promise. Now, it stands as the first major US bank creating a digital coin and one among others in the traditional banking industry to create a real-world application of blockchain technology.

Consequently, this development has aroused some controversial sentiments within the crypto community. According to MarketWatch, Jerry Brito – executive director at Coin Center told the news outlet that the JPM coin isn’t a cryptocurrency but an in-house-built payment system. The bank did clarify on the differences between its digital coin and cryptocurrencies, however, it is a popular sentiment that any product built on the blockchain is assumed to come with the tag ‘cryptocurrency’.

As explained on the bank’s website, it appears that the JPM coin isn’t a legal tender, but a digital coin backed by the US dollar – not a stablecoin either – stored in designated accounts of JPMorgan Chase. The bank said that when one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of US dollars, reducing the typical settlement time.

The JPM coin will only be used between its institutional clients as the core purpose of the coin is to save time for inter-bank/institution settlements, leveraging the robustness of the blockchain as opposed to legacy systems of money transfers. Accordingly, the coin will not be available to individuals, however, the bank says that the rippling effect in the efficiency of money transfer will confer certain benefits to individuals.

The bank may not stop at the digital coin alone, it said in its news release that with respect to its other businesses like custody or clearing and settlement, “it’s still too early to assess the ultimate impact of blockchain,” and it intends to further explore areas of applicability as it works with clients around the world. Perhaps, it may join the list of financial institutions proposing to offer custody solutions in an attempt to cater to institutional investors willing to join the crypto derivative market once the system is well regulated.

Blockchain-related trends in the banking industry have been growing of late with expanding use cases specific to interfacing with the technology to facilitate money transfers between financial institutions. As reported in December last year, Signature Bank’s Signet may have been the first regulator-approved blockchain-based payment system developed by a bank. It was designed to eliminate third parties and process payments faster between the bank’s clients.

Saudi Arabia and the UAE have been discussing plans on developing a blockchain-based cross-border payment system for inter-bank relations.

Moreover, the subject of a state-backed central bank digital currency (CBDC) has been frequently discussed in many banking circles. However, the views on such development have been rather polarized. Perhaps, this step made by JPMorgan will further facilitate the adoption of different blockchain use cases for other banks as they race for inclusion into the emerging market.

 

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JPMorgan Strategist Predicts Impending Heightened Crypto Interest from Wall Street

JPMorgan Strategist Predicts Impending Heightened Crypto Interest from Wall Street

With much talk in 2018 regarding Wall Street’s potential cryptocurrency uptake somewhat fading towards the end of the year, JPMorgan’s Global Market Strategist Nikolaos Panigirtzoglou is reigniting the flame.

The market needs to grow first, claims Panigirtzoglou, predicting the long-awaited and much talked about rush of institutional investment, but it is not going to be an overnight sensation. He argues: “The stability that we are seeing right now in the cryptocurrency market is setting the stage for more participation by institutional investors in the future.”

Partly, the slow uptake, according to the JPMorgan strategist, is regulators who are still a “bit slow to realize” the potential of the industry. A recent Circle report agrees, pointing out how ICO activity reduced in the second half of 2018 due to increased regulation, putting further downward pressure on the cryptocurrency market.

report points out that stablecoins, security tokens, and institutional crypto, by providing the solution of real-world problems and adding more certainty to the crypto space as a whole, are the next big thing. Last year, Cardano (ADA) co-founder Charles Hoskinson predicted that the entry of Wall Street into the sector would bring in “tens of trillions of dollars”.

Late last year, Wall Street’s previous crypto fervor cooled noticeably, with Goldman Sachs, Morgan Stanley, and Citigroup all shelving much publicized crypto-related products for a future date. Twitter CEO Jack Dorsey is biding his time and certainly holding on to his Bitcoin claiming it is “native to internet ideals”, and as such must be successful. Always resolute in his claims, Dorsey insists that:

“The world ultimately will have a single currency, the Internet will have a single currency. I personally believe that it will be Bitcoin.”

That being the case, Wall Street won’t be too far away when it happens.

 

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Is 2019 the Year of the Crypto Bull Market?

Is 2019 the Year of the Crypto Bull Market?

How Long Will the Crypto Market Bull Sleep?

Speculations about the cryptocurrency market continue to weigh heavily on the hearts of crypto enthusiasts as the market is yet to improve from the slump of 2018. The space is now left with dashed hopes, closed crypto exchanges, layoffs, hacks and a whole lot of constructive partnerships by the very few who truly understand what the blockchain is all about.

Reality has become grim for investors who hopped in at the all-time-high, especially shattering the expectations fueled by crypto influencers – the claims of Bitcoin reaching a high of USD 100,000 at the end of 2018. The ‘lambo’ songs that once reigned in many social communities have lost its savor as the lingo is being replaced with more realistic expectations such as measurable development goals and expected platform launch date.

Where are the 1000x’s promises?

Tough times greeted the new year, though still at the beginning of the year, many investors, as well as spectators, are wondering why the market still hasn’t had a bull run even though interest in blockchain has spiked. Some blame it on the delay in the entry of institutional investments.

Ripple CEO Brad Garlinghouse provided his personal opinion in a Blockchain Summit in Europe held at Brussels, saying that he estimates a 5 to 10 years waiting time for mainstream crypto payments.

This may be heartbreaking, as 5 years is indeed a long time to wait before hitting those 1000x’s again. More so, one would wonder if Ethereum’s co-founder Vitalik Buterin was right about his earlier predictions on the end of 1000x’s in crypto space. However, in just under a decade, cryptocurrency has evolved many times over.

The flagship cryptocurrency Bitcoin started its dramatic steep decline in the wake of 2018 and dragged the whole market with it after grazing an all-time-high of USD 20,000 the previous year. The cryptocurrency market with a cap of over USD 813 billion in November 2017 has now dropped to USD 114 billion according to data from CoinMarketCap as at press time. Surely, this drop in market value is enough to make investors wary.

The previous 3 years had seen a steady rise of activity in ICO markets, with 2016 recording an approximate fund collection of USD 93,922,741; USD 6,576,372,746 in 2017;  a reportedly recorded USD 21,576,147,596 in 2018 and now, in 2019 ICOs have raised over USD  126 million and still counting, according to data from CoinSchedule. With these humongous figures, it behooves one to wonder what happened to post-ICOs and why the current conditions appear rather stale.

What’s wrong with Crypto?

Brad has said that the biggest risk in the market is regulatory uncertainty. With the Securities Commission of different jurisdictions like the US SEC breathing down the necks of ICOs for securities compliance and making scapegoats out of defaulters, startups are exercising more caution. Binance CEO Changpeng Zhao had opined that 2018 was a year of correction and expressed his confidence for the future of crypto, however, he also pointed out that lack of clarity from regulators was a major drawback.

An analyst from JPMorgan expressed his skepticism about cryptocurrencies saying that real use for cryptocurrencies will only be in a dystopia – [one that has been duly noted in some hyper-inflated economies] – and that despite the correlation, the crypto market has with traditional assets, it’s of little value because of the prolonged bear market.

Legislation has indeed pegged the growth of the industry to a certain degree – at least from the cryptocurrency market perspective. However, some jurisdictions are opening up to the Idea of regulating the space in a way that innovation isn’t stifled. What’s left is for blockchain projects to live up to the hype that once ruled the space by developing more proof of concepts that are usable beyond the cryptomarket, as the market has so far proved to be a poor benchmark for the healthy state of blockchain enterprise.

For a while, the promise of institutional grade crypto services by elite financial systems such as Fidelity, and Intercontinental Exchange’s Bakkt has held many ‘hodlers’ ransom. Fortunately, as the space continues to mature, it becomes less reliant on external influences and survives on its initial narrative – decentralization.

Amid the market downturn, regulatory uncertainties, organizational restructuring, high expectations of institutional players; immense developments and innovation are driving adoption such as the rise in the numbers of Bitcoin ATM kiosks, use of crypto in charity, banks collaborating for cross-border payments, legacy systems shifting towards blockchain to tackle logistics problems. Perhaps, the market is just one trigger away to the next bull-run.

 

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