Monday, December 5, 2022

JPMorgan Contemplates Shifting Quorum Blockchain Project

JPMorgan Contemplates Shifting Quorum Blockchain Project

The United States’ biggest lender JPMorgan Chase and Co. is pondering whether it should re-purpose, or un-hitch, its main blockchain technology project Quorum. According to Reuters, anonymous sources reported that if the spin-off does take place, it would be to “increase the platform’s appeal” via independence from JPMorgan. 

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A Quorum Shift?

The banking giant JPMorgan launched Quorum in 2016  as its own version of blockchain technology, built atop the Ethereum blockchain with the purpose of simplifying and increasing efficiency in the company’s clearing and settling operations and overseas payment transactions.

The primary intention of the project is to build a customized digital ledger for clients. At present, enterprise companies using the customized digital ledger include heavyweights like Microsoft and Pfizer.

According to Caitlin Long, a Morgan Stanley veteran and now prominent figure in the blockchain community, “Blockchains only work if there are network effects; it doesn’t make sense if the banks are using it only internally.”

That seems to be the problem JPMorgan has come up against. Rival banks of the JPMorgan Chase have so far been hesitant in using the Quorum blockchain as it is linked with JPMorgan. Therefore, if it operates as a separate entity, the hope is that more banks and institutions would be willing to embrace the technology.

Independence Could Lead to Wider Adoption

JPMorgan’s Blockchain Center of Excellence Executive Director Amber Baldet could run the Quorum project in case of a spin-off. Of course, JPMorgan would presumably keep some stake in Quorum after the split, though nothing is certain at present.

In a statement regarding the recent reports, JPMorgan spokesperson Brian Marchiony noted:

“We continue to believe distributed ledger technology will play a transformative role in business, which is why we are actively building multiple blockchain solutions. We’re not going to comment on speculation, but Quorum has become an extremely successful enterprise platform even beyond financial services and we’re excited about its potential.”

Last year JPMorgan exited from R3 — an association of banks working on the customized Corda blockchain system. Apart from JPMorgan, many other banks globally have been piloting their own respective blockchain projects.

For now, the banking giant has not arrived at a public conclusion, but many industry experts believe the project will only scale if it operates as an independent entity.

Would a split see wider adoption of the Quorum blockchain technology? Let us know your views in the comments section.

Images via Fortune, JPMorgan

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