TL;DR: What a difference only a couple of years make. JPMorgan Chase & Co., the largest investment bank in the United States, recently noted, “Crypto assets have a place in investors’ portfolios only as a hedge against a loss of confidence in both the domestic currency and the payments system.” That’s a far cry from the official position not too long ago when its CEO famously dogged mere mention of cryptocurrency.
JPMorgan 180° Change on Bitcoin in New, 74 Page Report
Bloomberg’s Matthew Leising took notice of how “JPMorgan Chase & Co. is broadening its perspective on blockchain technology to show how digital money will change the financial world” in a new, 74-page report. “The emergence of linked databases like the blockchains that enable Bitcoin and Ether to exist as well as changing consumer preferences has turned the modernization of payments into a global theme,” Leising explained of the world’s 6th largest bank by total assets.
JPMorgan cited the advent of settlement systems like Paxos, the bank’s own coin, and China’s progress toward a state-backed crypto as undeniable trends. “2019 will be remembered for the rise of digital money. The groundwork is now in place for more mainstream adoption of blockchain technology at the same time that the foundation is being established for the development of digital currency and fast payments,” Bloomberg quoted from the report.
Payments, trade finance, and custodial services remain the clearest use cases for blockchain. The supply chain structure viewed as ripe for disruption is often a limiting factor in an industry still in the early days of leveraging data analysis, let alone applying new technologies.
The report comes just weeks after rumors surfaced JPMorgan was in negotiations for a merger with Ethereum-based company ConsenSys, spinning off the bank’s blockchain division, Quorum. It all amounts to what can be considered a substantive, 180° change with regard to crypto. Infamously, JPMorgan CEO Jamie Dimon ridiculed the very concept of Bitcoin back in 2017 as it gained speculative price steam.
“The failed release of Facebook’s Libra serves as a reminder that rapid adoption faces practical challenges to attain scale,” the bank stressed the giant pushback against ZuckCoin from lawmakers around the globe. The report did, however, continue JPMorgan’s supposed “reservations” about how the role cryptos might “play in global portfolio diversification or as a hedge instrument,” only to almost in the same breath suggest they were appropriate in such cases as lacking confidence in government-issued notes or the legacy system at large. The bank appeared to sour on blockchain technology talk as it relates to supply chain management, all the rage not too long ago as well. “Payments, trade finance, and custodial services remain the clearest use cases for blockchain. The supply chain structure viewed as ripe for disruption is often a limiting factor in an industry still in the early days of leveraging data analysis, let alone applying new technologies,” Bloomberg quoted from the report.
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