JPMorgan Chase could spin off its main blockchain project, Quorum, after deciding the efforts would be better off in the home of an independent business.
The Financial Times, citing people familiar with the situation, reported that Quorum — JPMorgan’s version of blockchain, aimed at making operations like clearing, derivative settlements and cross-border payments faster and more efficient — failed to resonate with rival banks that weren’t keen on using Quorum because it is so closely tied to JPMorgan. That resulted in JPMorgan deciding that Quorum would have a better shot at being an industry standard if it operated independently of JPMorgan.
In an email statement to the Financial Times, JPMorgan said: “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.” The statement noted that JPMorgan plans to keep a minority stake in Quorum once it is spun off, which may happen in 2018. The Financial Times noted that Amber Baldet, the blockchain program lead at JPMorgan, could leave if it spins out the project — or she could opt to create her own blockchain project for the financial services industry.
The move comes as JPMorgan has had a rocky relationship with cryptocurrency, which is made possible because of blockchain technology. Last year, amid a huge run-up in the price of bitcoin, JPMorgan Chief Executive Jamie Dimon called it a fraud and vowed to fire any trader who was trading in digital tokens. He has since walked back those comments, saying he regretted making them and noting that he is a big supporter of blockchain technology. “I regret making [those comments],” Dimon said earlier this year. “The blockchain is real. You can have crypto yen and dollars and stuff like that.” JPMorgan isn’t the only bank eyeing blockchain technology, with many taking stakes in R3, which is a consortium of banks developing blockchain systems. JPMorgan pulled out of that consortium, noted the Financial Times.