JPMorgan Chase and Goldman Sachs Disrupt Blockchain and Digital Assets Realm.

by | Jun 25, 2023

The financial industry is undergoing a major transformation thanks to the rise of blockchain technology and digital assets. Major players like JPMorgan Chase and Goldman Sachs are leading the charge, exploring the potential of these technologies to increase efficiency and security in financial transactions.

Goldman Sachs launched its digital asset platform in November 2020, which has already been used by German firm Siemens AG to make euro payments. JPMorgan, on the other hand, is exploring the possibility of a digital wallet or a Web3 digital ID offering, which would allow users to move freely across digital realms in a trusted way, using a single digital identity in multiple places.

JPMorgan’s platform for dollar payments was launched in 2019, enabling wholesale payments clients to transfer dollars or euros between JPMorgan accounts globally, or make payments to other bank customers using blockchain technology instead of traditional payment methods. Compared to traditional transactions, which are processed only during business hours and take longer, JPM Coin payments operate 24/7 and execute transactions more quickly.

JPMorgan has reportedly processed nearly $700 billion in short-term loans on its digital asset and tokenization platform Onyx, with more to come in the near future. JPMorgan has also expanded its JPM Coin blockchain payment service to include euro-denominated transactions for corporate clients.

According to Tyrone Lobban, the head of JPMorgan’s digital asset and tokenization platform Onyx, “We think that tokenization is a killer app for traditional finance…If you think about private markets – private credit, private equity, and private real estate – they are pretty much double the size of public markets, but many orders of magnitude less liquid, so there’s this huge disparity.”

JPMorgan has been a strong proponent of blockchain technology, claiming that it could help ease cross-border payments. Despite the skepticism of some who believe blockchain is a solution in search of a problem, JPM Coin has been relatively successful, with around $300 billion worth of transactions processed since its launch.

Other banks, such as Goldman Sachs Group, Banco Santander, and Societe Generale, are also pushing ahead with their own blockchain and digital asset projects. In late April, JPMorgan announced that it was moving forward with its push to tokenize traditional financial assets despite last year’s market downturn. These three banking giants also helped the European Investment Bank issue a digital bond last year using blockchain technology, marking a significant step forward for the use of blockchain in the financial industry.

Overall, the use of blockchain and digital assets in the financial industry is growing rapidly. The benefits of these technologies, including increased efficiency and security, are becoming increasingly clear. As more banks and financial institutions explore the possibilities of these new platforms, it is likely that we will see even more innovation in the world of finance in the years to come.