J.P Morgan Files Patent For Blockchain-Powered P2P Payments Between Banks
An open critic of Bitcoin, a.k.a Jaime Dimon, is getting skin in the game, in a rather amusing reversal of business strategies. You cannot make this stuff up!
Mainstream Blockchain Adoption has Arrived
JP Morgan Chase & Co. has outlined a peer-to-peer payments network in a patent application filed with the U.S. Patent and Trademark Office (USPTO) last week on, May 3, 2018.
Many critics of Bitcoin are bull on “blockchain tech”, so actually this comes as no surprise. Despite what CEO Jamie Dimon might say about cryptocurrencies, U.S. banking giant JPMorgan Chase has to innovate to keep with others in the payments application of the blockchain. This means the entire financial services industry will basically go this route as well.
The Chase network would use distributed ledger technology (DLT), such as blockchain, for intra- and inter-bank settlements. When Chase acquired WePay near the end of last year, you knew what was coming. It’s a peer-to-peer world and with Ripple’s adoption by major financial institutions notably in Japan, and with the rise of TransferWise and Revolut, Chase needs to stay relevant.
The blockchain is what the blockchain does, and it’s inevitable being integrated into business models in a wide range of industries. According to Fortune, JPMorgan outlined a system that uses distributed ledgers to record payments being sent from one bank to another using a peer-to-peer network. According to the bank, the tech’s use would provide “a unique system for recording transactions and storing data.”
Jamie Dimon is Eating his Words
In recent months J.P Morgan chase has also partnered with Amazon for some kind of checking account. Back in September, Dimon made headlines when he threatened to fire any JPMorgan employee who will trade in BTC, calling the cryptocurrency a fraud and a bubble that would eventually “blow up.”
The Chase CEO made headlines in how backwards the financial services industry is in blockchain innovation. Meanwhile, naming cryptocurrencies as a threat to their business model — talk about a story of public relations gone awry.
J.P. Morgan is also considering a spin-off of its marquee blockchain project Quorum believing independence from the bank could increase the platform’s appeal. Quorum is among a swathe of initiatives by large banks on blockchain, even as the central banks of multiple nations suggest that they will make their fiat currency digital money on the blockchain all within a few years’ time.
Jaime Dimon’s strategic tirade on Bitcoin and Blockchain, was both embarrassing and a sign of things to come for J.P Morgan Chase.
His arrogance in relation to cryptocurrencies might also mean J.P Morgan Chase took a hit from how Millennials see the mega bank.
JPMorgan was among the banks that left blockchain consortium R3 last year, while a partnership between Belgium-based settlement provider Euroclear and U.S. startup Paxos to develop a blockchain-based service for the London gold market was dissolved in July. Now in 2018, it turns out that J.P. Morgan will do the acquire and in-house approach to develop their own blockchain payment solutions.
Skip to 48 seconds to hear more of Jaime Dimon’s view on Bitcoin:
If banks think basing what could be an existential threat to their business model makes sense, it might for GenX and Babyboomers, Millennials could take an entirely different route with their investments altogether.
Is America a Loser in Blockchain Innovation?
That J.P Morgan Chase is now thinking about P2P networks is so entirely ironic! They are witnessing the mounting cryptocurrency ecosystem and how it could scale against its own business model.
In particular for cross-border payments we are seeing Revolut and TransferWise quickly gaining momentum. Though America is trending a bit as the backwaters of FinTech and cryptocurrency development. In large part, that’s because of the huge amount of control that their Banks have.
J.P. Morgan of course has already built its own blockchain on Ethereum dubbed “Quorum,” that was designed to toe the line between private and public in the realm of shuffling derivatives and payments. With the emergence of Coinbase and Robinhood as mainstream apps, it’s hard seeing big banks keeping up with the rise of the new ecosystem and the push towards decentralization that a lot of older execs have some difficulty understanding.
Jamie Dimon’s defiant stance is very much authoritarian when it comes to American rules and regulations, which means with the SEC’s crackdown, America has quickly become a less interesting place for ICOs and defacto, crypto innovation to take place.