JPMorgan, National Bank of Canada, others test debt issuance on blockchain

Pedestrians cross a foot bridge towards the offices of global financial institutions, including JPMorgan Chase & Co. along with the commercial office block No. 1 Canada Square, from the Canary Wharf financial, shopping along with business district in London, U.K.

Chris Ratcliffe | Bloomberg | Getty Images

Pedestrians cross a foot bridge towards the offices of global financial institutions, including JPMorgan Chase & Co. along with the commercial office block No. 1 Canada Square, from the Canary Wharf financial, shopping along with business district in London, U.K.

J. P. Morgan Chase & Co has tested a completely new blockchain platform for issuing financial instruments with the National Bank of Canada along with some other large firms, they said on Friday, seeking to streamline origination, settlement, interest rate payments along with some other processes.

The test on Wednesday mirrored the Canadian bank’s $150 million offering on the same day of a one-year floating-rate Yankee certificate of deposit, they said in a statement. The platform was built over more than a year using Quorum, a type of open-source blockchain of which JPMorgan has developed inhouse along with is usually in discussions to spin off.

Participants from the experiment included Goldman Sachs Asset Management, the fund management arm of Goldman Sachs Group Inc, Pfizer Inc along with Legg Mason Inc’s Western Asset along with some other investors from the certificate of deposit.

Banks have poured millions of dollars to develop blockchain, the software first created to run cryptocurrency bitcoin, to streamline processes ranging coming from cross-border payments to securities settlement.

“Blockchain-related technologies possess the potential to bring about major change from the financial services industry,” David Furlong, senior vice president of artificial intelligence, venture capital along with blockchain at National Bank of Canada, said in a statement.

JPMorgan is usually considering spinning off Quorum because the technology has attracted significant outside interest, Umar Farooq, head of blockchain initiatives for JPMorgan’s corporate along with investment bank said in an interview.

He said This specific was taking too much time to field requests for help coming from users at some other companies.

Charging for assistance is usually not an option because software support is usually not the bank’s business, a person familiar with the matter said on condition of anonymity. The source was not authorized to discuss the matter publicly.

The spin-off discussions are from the early stages along with the bank has received interest coming from financial institutions along with large enterprise technology companies, Farooq added. He declined to name the companies.

JPMorgan plans to beef up the Quorum team with dozens of engineers coming from the bank’s some other divisions who have become familiar with the technology, he said.

Blockchain is usually from the early stages of development from the financial industry, although JPMorgan is usually optimistic about its potential, Farooq said.

“We haven’t truly seen a lot of truly large scale things go into production yet. There are few cases where blockchain can truly shine.”

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