JP Morgan’s New DLT Lead: We’re Not Done With Blockchain Innovation
JP Morgan’s New DLT Lead: We’re Not Done With Blockchain Innovation

Last month was nothing but short of surprising and full of changes. We saw that one of the important figure in Blockchain, Amber Baldet, left to form an unnamed startup, JP Morgan was considering a spin-out of Quorum, which is an ethereum-based, open source project on which the bank’s Blockchain work relies heavily upon, and Christine Moy took over Amber Baldet.

The above scenario points to a rather struggling image of Quorum but that is quite far from the truth. Though it can be asserted that Quorum has become a causality of its own success as more than 20 organizations are looking to build upon it.

Moy quickly emphasized in an interview this week that the speculation around Quorum does not do justice to JP Morgan’s work in Distributed Ledger Technology (DLT).  Though it’s true that JP Morgan is involved in a number of projects such as its association with Axoni and Nivaura. However, the challenge of allowing Quorum to flourish independently remains and it hangs in sort of dilemma right now.

The only upside for JP Morgan is its hiring Moy who is not only well aware of the project but is also quite familiar with the reason the bank started exploring the tech.

Cross Trained for Blockchain

Moy at JP Morgan was the perfect candidate for the job as she started her career in the offices of JP Morgan syndicated loan business, she had to deal with documents that needed to be signed before the transaction closed as these types of loans take 20 days to settle. In Moy’s own word “I used to be the person that faxed these documents around to settle those trades, so I know that process intimately.”

After this, she worked across a range of assets and divisions of the bank for a decade. She witnessed the freezing of chain of custody and securities during the 2008 crash that swallowed the entire financial system. With that history, Moy was a natural for the BCOE, where she was Baldet’s first choice. With all this extraordinary amount of training, she has brought the immediate knowledge of the problems that distributed ledger technology aims to solve to the role.

Open Source, Open Mind

Quorum is a private Blockchain that was built with open-source coding. It was in a rage when enterprises were keen to experiment with technology but steered clear from cryptocurrency. According to various ethereum advocates, we are just at the starting phase where the desired end goal is to connect the private world of finance to public Blockchain.

With the help of the spread out developer community and Ethereum Foundation EEA, who recently published its architecture stack diagram, is continuously building these bridges. Moy has made her ‘neutral’ position about which Blockchain or protocols are to be used quite public and said that it is rather more significant to stay updated about the innovation taking place in the public sphere. She quite firmly believes that the basic building blocks for enterprise DLT are now in place.

Quorum Quandary

Returning back to Quorum, Moy sees Quorum as having a life of its own which was acquired by handing such open source software to the community. According to her she has been “entering this interesting point where other entities want to use Quorum, want to take it to production.” She noted that a whole host of entities like IHS Market, ING and BlockApps has picked up Quorum and started using it.

John Olesky, managing director at IHS Market said that “Quorum has strong momentum in capital markets, it benefits not only from the halo effect from JP Morgan and the technological rigor that comes from global bank skilled in enterprise-strength software and compliance issue such as privacy.”

This brings forth an issue as it requires a support which can only be brought by a company dedicated to helping enterprise integrate the technology. Businesses require an entity that can be called to fix bugs or when the network is down as the software support is not the bank’s job.

This is the reason behind the possible spin-out by JP Morgan apart from this the bank has also been investing internally by hiring more engineers. While Moy is focused on getting more business applications to Quorum because of which her team recently executed a $150 million Yankee certificate of deposit in to form of ERC-20 token on Quorum.

She recently said that “This is an example of us issuing a traditional financial instrument natively on the Blockchain. But the next phase is when you have real asset managers participating in a product like this; it’s about what does custody looks like? What does fund administration looks like? And what does a trades market look like for something like this?

It is quite clear from this that she views the trial as a signal of a more open and transformed financial system.