In New Comments, JP Morgan Blockchainer Hails Tokenization on Quorum
At the annual Sibos conference, the director of blockchain projects at powerhouse American bank JP Morgan revealed the firm’s Ethereum-based blockchain platform Quorum is beginning to actualize the tokenization of real-world assets like gold.
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Tokenizing Physical Assets, the Quorum Way
At last week’s annual all-things-banking Sibos conference, JP Morgan’s head of blockchain initiatives Umar Farooq divulged the firm’s Quorum blockchain — a private fork of Ethereum — is already being used to tokenize physical assets outside the digital realm.
Accordingly, Farooq highlighted that the tokenization of gold bars had recently been undertaken via Quorum. The idea was to encode and track gold bars along each stage of the supply chain, ensuring the provenance and purity of the metal.
“They wrap a gold bar into a tamper-proof case electronically tagged, and they can track the gold bar from the mine to end point,” Farooq said. “The use case being, if you know it’s a socially responsible mine, someone will be willing to pay a higher spread on that gold versus if you don’t know where it comes from.”
Finding the Middle Ground
In his Sibos remarks, Farooq notedd Quorum was not limited to being pegged to precious metals.
Without naming names, Farooq said undisclosed groups were considering the deployment of Quorum in use cases ranging from secondary markets to capital markets issuances.
“The entire value chain is going to head in that direction,” he said.
However, what remains to be seen, at least in the macro sense, is how the tides will break over the next 10 or 20 years: will enterprises gravitate toward public platforms like Bitcoin and Ethereum, or will private blockchains like Quorum be better at capturing mainstream players?
It’s a question that is open for now, though Farooq did peripherally touch on the public-private dichotomy at Sibos.
“We are all building private networks but there is a long-term thought process of what happens when you get to a point where you need to do private-public convergence, a connection,” Farooq said. “At that point, if you are in some ways a derivative of a public platform, it could become easier.”
The new comments come several months after JP Morgan reportedly began considering a “repurposing” of Quorum. As described at the time, if such an initiative did materialize, it would involve putting more space between JP Morgan and Quorum and not the other way around.
Are we really entering the era of tokenization? Share your views in the comments section.
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