JPMorgan: Blockchain is the Real Deal, Get Off the Sidelines

 JPMorgan Chase and consultants Oliver Wyman have joined calls for traditional investment banking to “embrace the Blockchain” or be left disadvantaged. Also read: Forex Expert: Bitcoin Should Be Taken More Seriously 

JPMorgan: ‘Get Off the Sidelines’

In a joint report issued last week, the firms described the current industry mood as “a consensus… forming that [Blockchain] is the real deal.” “Disregarding it is a risk,” they write. Wyman and JPMorgan, the latter already heavily invested in ‘testing  the water’ regarding Blockchain particularly for payments, highlight  what they see as a lack of activity on the part of asset managers. They  argue in the report: 

The blockchain journey  is likely to be long and the outcome is uncertain […] asset managers  need to get off the sidelines and take the initiative to understand and  embrace blockchain.
 

Last week similarly saw a report  by consultancy firm Bain & Company which criticized banks for  adopting a “wait and see” approach to growing innovation, something  which could leave them “flat-footed” and vulnerable to competition and  revenue collapses of up to $150 billion. JPMorgan and Wyman however adopt a more measured tone. “Initially, we expect the first two waves to be focused on sharing  and using data, before expanding to critical infrastructure once  confidence in distributed ledger technology grows,” the partners state.  “The final wave, in which a truly decentralized financial ecosystem  arises, is perhaps the most ambitious and the most uncertain.” The full benefits to asset managers of a blockchain takeover would be felt only around 2030, they add. 

A Long Journey Indeed

JPMorgan meanwhile is seeing a shakeup of its own path to direct  Blockchain involvement. Its dedicated project, Juno, which the bank  intends to use as a test for international Blockchain payments, lost its  executive director in June. Stuart Popejoy, together with lead developer Will Martino, left to form their own startup called Kadena.io, Quartz reports. The bank was also pipped to the post by a Ripple-AFB Financial partnership, which sent the first international interbank Blockchain payment last week. Nonetheless, testing of the Ethereum-esque Juno is due to involve  2,200 clients in the UK and Japan, showing the scale of JPMorgan’s  ambitions. “Just as it was impossible to predict the impact the internet would  have on financial services, it is impossible to know with certainty how  markets will look or operate when distributed ledgers and  cryptographically secured digital assets are the norm,” the report adds. 

However, recognizing  the impact that FinTech innovation continues to have on the industry, it  is pragmatic to be well-informed and organized to unlock economic  advantage in an increasingly digital world.

 By William Suberg