JPMorgan Chase & Co.’s (JPM) distributed ledger venture, Quorum, recently made news when its head, Amber Baldet, moved on to start her own company. But her departure has hardly put the brakes on its ambitious plans for the future. (See also: JP Morgan Looking to Ethereum Blockchain.)
A post in Coindesk states that Quorum has “amassed a tribal following” among developers. In an interview with the publication, Christine Moy, who replaced Baldet, detailed Quorum’s plans for the future. The division, which may be spun out into a separate company of its own, recently automated the delivery of a $150 million Yankee certificate of deposit using ERC-20 tokens on its platform. This means that investors received the certificates only after they deposited the required cash. The successful execution of contracts may just be the beginning. (See also: JPMorgan Unveils Blockchain Money Transfer Project.)
The world of securities settlements could be transformed through the use of blockchain technology. According to a study by consulting firm Capgemini, smart contracts could bring down settlement times and boost demand for syndicated loans by 5% to 6%. Those figures could translate to additional income of between $2 billion to $7 billion annually. More recently, a study by central banks in Europe stated that distributed ledger technology could lead to the development of new securities.
Private Vs. Public Blockchains
Moy is a JPM veteran and was Baldet’s first hire for the Blockchain Center of Excellence set up by the investment bank. During the interview, Moy stressed the importance of interoperability between various blockchain networks. Her view is interesting given the industry’s dynamics. Purists have criticized the development of permissioned ledgers because it is a violation of the transparency tenet for blockchains. But banks and other financial institutions are hesitant to put sensitive customer data out onto public networks without security safeguards.
Quorum has its hands in both pies. It has partnered with privacy-focused cryptocurrency zCash to create a zero-knowledge settlement layer. But it is an open-source smart contract platform, meaning that its underlying code is available for reuse. Moy is also open to the idea of integrating public and private blockchains within the same enterprise. According to her, blockchain’s cost efficiency will suffer unless the multiple silos that comprise a bank’s financial system remain intact. These silos can take the form of different technologies or protocols for a system that result in lack of communication between the two.
Moy told Coindesk that she is “agnostic” regarding choice of protocols. "One of the important things for us working on an ethereum variant was kind of being able to stay close to that and potentially even being able to integrate some of that innovation and work into the stuff that we are doing,” she told Coindesk.
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