Financial behemoth J.P.Morgan Chase has been secretly experimenting with a blockchain-based system to execute fiat currency transfers between Tokyo and London. According to a WSJ report, Daniel Pinto, Head of Corporate and Investment Banking at J.P.Morgan, said that the experimental system has been used by 2,200 of the bank’s clients to send US dollars abroad in the last few months.
J.P.Morgan recently partnered with Digital Asset Holdings, a blockchain solutions firm in New York, to experiment with distributed ledger tech in improving the settlement of loan securities.
The bank has already invested in multiple blockchain startups and has plans to bolster its fintech spending in the next few years.
James Dimon, CEO of J.P.Morgan Chase, held an Investor Day conference call today, which reaffirmed the bank’s plans to increase its technology spending to counter the rising tide of fintech solutions coming out of the blockchain space.
According to the WSJ article, Dimon has been aware of the potential threat posed to the legacy financial system from blockchain and bitcoin-based financial solutions since last year. In last year’s conference call, Dimon warned that the tech industry is coming with “hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.”
Matt Zames, Chief Operating Officer at J.P.Morgan, said that the bank plans to increase its technology budget to $9.4 billion for 2016, and 40% of that budget will be diverted to investments in new startups and novel technologies.
The bank is already part of the R3 consortium of financial institutions with interest in blockchain tech, and also a member of the Linux Foundation, which is overseeing the development of the HyperLedger project.
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