JPMorgan Chase follows up on blockchain experiment: Bitcoin server can simplify loans and complete settlements, executive says

Author: Geneva

JPMorgan Chase, the largest bank in the United States by assets, is trying to streamline transactions through a digital currency platform called "blockchain," the Financial Times reported on Sunday. Blockchain, the technology that underpins the online bitcoin payment system, could make many types of transactions faster and more accurate, bank officials said.

"Blockchain has a huge role to play in everything that's connected, not just lending. It's early days and it's going to be very good," Daniel Pito, head of investment banking at JPMorgan Chase, told the Financial Times.

The blockchain is like a public ledger that can store transaction information without the need for a central bank to act as an intermediary. When Bitcoin and cryptocurrencies were still only available to a very small number of people, JPMorgan Chase has been trying to shift to this information-sharing industry model. Digital Asset Holdings, a digital technology company run by former JPMorgan Chase executive Bryce Masters, has formed an alliance with the company.

Goldman Sachs has also used similar technology, also because of its potential to reduce costs and make transactions faster. "From bank payments to notarized voting systems to vehicle registrations, wire fees, gun inspections, school records, trade settlements, and copyright catalogs for works of art, a shared ledger system can make interactions faster, cheaper, and more secure," a Goldman Sachs analyst told Business Insider in December.

The Economist reported in October that cryptocurrencies are increasingly favored by the financial services sector because of their tamper-proof ledger capabilities.

“When financial firms do business with one another, synchronizing their internal accounts is cumbersome and takes days to complete, tying up capital and increasing risk,” the report reads in part.

Blockchain can also make it easier for banks to do business with each other across borders by reducing their reliance on central banks. The Economist also reported that switching to a system like Bitcoin could save the financial services industry as much as $20 billion by 2020, citing retail bank Santander.

JPM compiled from

IB Times, JP Morgan Chase Blockchain Trial: Bitcoin Server Could Streamline Loans and Settlements, Executives Say, by Jess Mchugh.