JPMorgan Chase launches blockchain pilot project: lending sector bears the brunt

JPMorgan has begun building a blockchain pilot project to help the banking industry cut costs and simplify transaction procedures, according to the Financial Times.

JPMorgan Chase is working with Digital Asset Holdings (DAH), a New York blockchain startup led by "Queen of Finance" Bryce Masters, on a blockchain pilot project. The two are looking for a variety of blockchain technology applications, including dealing with JPMorgan Chase's loan funding liquidity mismatch problem, which usually requires investors to come up with their own money in a short period of time, while the sale of the underlying assets may take more time.

丹尼尔•平托, head of JPMorgan Chase's investment bank, said:

“The process of selling a loan is cumbersome and time-consuming and can take weeks.”

The world is exploring alternative solutions through blockchain, which makes the operation process easier and faster, and reduces errors in the operation process.

Blockchain has captured the imagination of the financial services industry over the past year, with a slew of firms looking for ways to use it to reshape many of their daily tasks, from revamping old back-office operating systems to self-executing smart contracts.

The technology is essentially a digital public database that continuously maintains and verifies records in blocks and shares information between parties. This means that payment ledgers can be updated instantly in multiple places without the need for a single central authority.

JPMorgan executives highlighted its participation last month in the Linux Foundation-led Open Ledger Project, which aims to create a standard that can be adopted by the entire financial services industry.

Pinto said that loans are a good place to experiment with blockchain technology because "the settlement process here is relatively complicated and requires a lot of manual operations and the participation of multiple parties."

Daniel Pinto, who is said to be a candidate to become the next CEO of JPMorgan Chase, is delighted with the project's progress.

He said:

“Blockchain has a lot of potential for everything related to settlement, not just loans. It’s still early days, but it looks really good.”

DAH CEO布莱斯•马斯特斯noted that faster settlements would “reduce capital requirements, lower operating costs and improve the customer experience.” The former head of JPMorgan Chase’s global commodities business has said that reducing the cost of financial transactions is “one of the greatest challenges of our time.”

Not long ago, DAH received a $52 million investment from investors including JPMorgan Chase, Citigroup, Deutsche Börse and depository and clearing institutions.

Autonomous Research, a New York-based financial services research firm, estimates that global investment banks currently spend about $50 billion a year on post-trade processes, and the application of blockchain technology can save about one-third of these costs.

布赖恩•福伦, partner at Autonomous, said:

“In the pre-trade space, we have constant innovation. But in the post-trade space, very little has changed, and it’s still a manual process that takes at least three days.”

Original text: http://www.ft.com/cms/s/0/2d3f9296-c5ef-11e5-b3b1-7b2481276e45.html#axzz3ysh3yC2H
By Ben McLannahan
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/jpmorgan-blockchain-2)