JPMorgan Chase & Co has been testing a blockchain program over the past few months wherein US dollars are being moved between London and Tokyo using distributed ledger or blockchain technology, the same innovation used to power Bitcoin.
A Wall Street Journal report has revealed that JP Morgan Chase, the largest bank in the United States, has been ‘quietly’ testing US dollar transfers between London and Tokyo as a part of its blockchain program in recent months. JPMorgan’s head of corporate and investment banking, Daniel Pinto, has confirmed that about 2,200 clients in the UK and Japan are involved as a part of the transactional testing.
Significantly, Pinto also revealed that blockchain technology may be used by JPMorgan for live transactions later in 2016.
The tests are a part of the bank’s experiment to gauge the potential application of distributed ledger technology in currency clearing and settlement. Risks are lowered and efficiency is increased due to faster transactional times, thanks to blockchain technology, the same advantages that one sees when using bitcoin as a currency.
The WSJ’s scoop also revealed that the testing is one that will be revealed to JPMorgan investors during today’s annual presentation by executives including Chairman and CEO Jamie Dimon.
Cutting Infrastructure Costs, Increasing Blockchain Spend
This year, JPMorgan shares are down 11%, meaning the bank is looking to cut costs by shelving staff and shrinking assets in a diminishing market of profit margins. According to the report, the bank is cutting its spending on existing legacy technologies. Real estate locations housing technology employees are expected to come down in numbers.
However, the bank is expected to allocate more cash toward technology investment and partnerships while increasing cybersecurity spending by up to 20%. JPMorgan is expected to increase its overall technology spend to around $9.4 billion, about $200 million more from last year. 40% of that budget will go directly to new technology costs, up from 30% currently, according to JPMorgan COO Matt James.
In 2014 at an annual meeting of the banking elite, CEO Dimon famously stated:
(Bitcoin developers) Are going to try to eat our lunch, and that’s fine……That’s called competition, and we’ll be competing.
In late 2015, Dimon dismissed Bitcoin as “a waste of time” while being more encouraging toward blockchain technology.
More recently, at the World Economic Forum in Davos, Dimon reiterated his stance on Bitcoin “going nowhere”. About blockchain, he added:
The blockchain is a technology which we have been studying…and yes, it’s real.
With the latest reveal of actual US dollars being moved between the two financial hubs of London and Tokyo, JPMorgan also plans to expand its blockchain testing endeavor to real trades in the third quarter of 2016. At the time, certain investment banking and corporate clients, as well as hedge funds will partake in the blockchain tests.
JPMorgan’s Blockchain Binge
Featured image from Shutterstock.Follow us on Telegram.
• Join CCN's crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.