JPMorgan Commences Blockchain-Based Trial Project

JPMorgan Chase, one of the leading banks in the world, has started a trial project using blockchain technology in its efforts to reduce the cost and complexity of trading.

The Financial Times reported that the bank is collaborating with Digital Asset Holdings, the New York-based blockchain start-up company. Together, the companies are exploring various applications for the technology, including addressing liquidity mismatches in JPMorgan’s loan funds, which usually allow investors to withdraw their money at short notice — although the underlying assets can require much more time to sell.

“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”.

Explaining further, he said that loans were a good place to start the trial as “the settlement process is complex with lots of manual intervention and multiple parties”. He is pleased with the progress made so far.

Last month, Digital Asset Holdings announced that it raised more than $50 million in funding from a broad range of leading firms including JPMorgan.

“We are proud to be a lead investor in this round of financing,” said Mr. Viswanathan of J.P. Morgan at the time. “Distributed Ledger Technology has the potential to transform the way our industry does business, and we believe Digital Asset has the right talent and technology to make it a reality.”

The bank is also involved in the Open Ledger Project that aims to transform the way business transactions are conducted around the world.