JPMorgan Chase and Blythe Masters’ Digital Asset Holdings Trial Blockchain Project

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by Tatsiana Yablonskaya · 3 min read
JPMorgan Chase and Blythe Masters’ Digital Asset Holdings Trial Blockchain Project
Photo: Derin Khsro/Flickr

The project aims at transformation of loans and settlements with a help of blockchain technology.

JPMorgan Chase, the largest US bank by assets, takes considerable step in its effort to explore the potential of blockchain. It started a trial blockchain project aimed at adopting the technology to the banking industry.

JPMorgan has partnered with Digital Asset Holdings managed by Blythe Masters. “The pair are looking at several applications for the technology, including addressing liquidity mismatches in JPMorgan’s loan funds, which normally let investors take out their money at short notice — even though the underlying assets can require much more time to sell” – the Financial Times reported on Sunday.

Blockchain has appeared to be in the limelight of multiple financial companies within the past year. This digital public database is believed to be able to transform daily operations for the better. It does away with the need for intermediary of a central banking authority.

“To sell a loan is a very cumbersome, time-consuming process; settlement can take weeks,” said Daniel Pinto, head of JPMorgan’s investment bank. “Exploring alternatives through blockchain makes all the sense in the world; it’s easier and faster operationally, and you get fewer mistakes”. He also point out that loans were a good place to start trialing blockchain technology, because “the settlement process is complex with lots of manual intervention and multiple parties”.

JPMorgan Chase was named one of the banks that will considerably benefit from the coming wave of financial technology disruption according to the survey conducted by the Autonomous Research. The survey showed that U.S. banks will suffer only limited disruption from financial industry startups.

150 executives and investors from banking and insurance companies were polled by one of the Europe’s leading independent research providers. Approximately 85% of them predicted selected disruption or a mix of winners and losers. Only 14% thought banks face a significant threat. JPMorgan, as well as Goldman Sachs, are those very banks that will likely get the most considerable revenue from investment banking and trading worldwide. They are followed by Visa Inc. and MasterCard Inc. This is easily explained by the fact that mobile payments become more habitual while the blockchain reduces costs in many institutional businesses.

The partner of JPMorgan, blockchain technology company Digital Asset Holdings, has recently raised $50 million in funding from multiple world’s leading companies. “These investments represent a tremendous endorsement of Digital Asset from banks, exchanges, settlement and clearing firms, central securities depositories, and market infrastructure and professional services providers. Our strategic investors have come together from across the financial services industry to help drive global adoption of transformative solutions which enhance the vital services that they provide” – said Blythe Masters.

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