The list of big names that are gaining trust and accepting the blockchain technology in all its glory are constantly increasing in the financial and tech world. Recently, the famous JP Morgan has made it to that list, as its chief information officer (CIO), Lori Beer, was quoted saying,
We will see 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 shared her views about blockchain and its future with the company in a press conference, which was held in JP Morgan’s office in Buenos Aires, Argentina.
The recent stance of one of the biggest financial companies in the world comes as a slight surprise, considering it was only a year ago that famously addressed Bitcoin a ‘fraud’, all the while threatening to fire anyone in the company caught trading in crypto.
Even though the CEO of JP Morgan, Jamie Dimon, still feels skeptic about the complete acceptance of cryptocurrencies, however he did acknowledge blockchain’s reality and its potential to carry out global payments efficiently.
During the press conference Beer confirmed that blockchain is one of JP Morgan’s top three priorities, alongside Artificial Intelligence and APIs. As of now the company is using blockchain technology to simplify the payment process and to store customers’ information related to KYC (Know Your Customer) policy and for Anti-Money Laundering (AML) during transactions from other banks.
JP Morgan is currently experimenting with their open-source blockchain, which is based on Ehtereum, called Quorum, that was launched earlier this year to facilitate the use of smart contracts. She further stated;
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.
Beer also clarified that their use of blockchain is not just about cost cutting rather they are looking for opportunities for the development of new products.
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.
Despite the positive prospects of blockchain, JP Morgan is steering clear of crypto. Beer accredits this to the fact that the bank does not currently support cryptocurrencies like bitcoin (BTC) and Ethereum (ETH) and said;
The bank only supports everything that is regulated…we aim at everything regulated.
Beers responded when asked how the bank will address clients who wanted to trade cryptocurrency. However she preferred not to respond when she was asked about the institutional position regarding initial coin offerings (ICOs).
One thing’s for sure about JP Morgan, that they have plans for utilizing the blockchain technology, despite their bashing views on cryptocurrencies.
[JPMorgan] is testing [blockchain] and will use it for a whole lot of things.
Said Dimon, earlier in August.
The company also filed a patent this year in May, which was for a blockchain powered person-to-person payments network that could function for intra and inter bank settlements. The application intends to use a distributed ledger in order to process payments in real time. This would eliminate the element of a trust worthy third party to hold the true golden copy of the audit trail.