JP Morgan Chase & Co. is reportedly conducting under the radar tests on the use of blockchain technology on transfers of US dollars between London and Tokyo.
The bank may start using blockchain for live transactions later in 2016 according to details emerging from its investor presentation.
The technology, which underpins the Bitcoin cryptocurrency, has been tested with 2,200 of the banking giant’s clients, said Daniel Pinto, Head of J.P. Morgan’s corporate and investment bank.
His firm wants to ascertain whether or not the distributed ledger technology can be used for currency clearing and settlements to increase the speed of transactions, as well as reducing risk.
It is also thought that the bank will outline plans to assign more money to application development and fintech partnerships, as well as increasing its spending on cybersecurity by 20%. The boost in tech spending comes despite the fact the bank is going to cut over 5,000 jobs, amid broader cost cutting measures.
The bank’s overall technology spend will increase to about $9.4bn during the course of 2016, up from around $9.2bn in 2915. Around 40% of that will be allocated to new investments and technologies, said the bank’s COO Matt Zames, up from 30%.
It is thought that the firm has 40,000 technology employees, around 17% of the total number at the firm. Significantly, the Wall Street Journal reports that the number of developers it employs is up by 10%, to approximately 18,500.
JPMorgan is far from the only large financial firm to delve into the world of blockchain. Barclays has brought two blockchain firms into its New York based fintech accelerator, while RBS is also thought to be testing blockchain based technology. UBS has also donated blockchain code to a fundraising effort for HIV.
Many banks, including ABN Amro, Deutsche Borse, BNY Mellon, Wells Fargo, and JPMorgan are involved in Hpyerledger. This is a collaborative project in which major finance and tech firms are coming together to advance the use of blockchain technology.
Furthermore, nine major investment banks – Goldman Sach, JPMorgan Credit Suisse, Barclays, Commonwealth Bank of Australia, StateStreet, RBS, BBVA and UBS are all part of a blockchain initiative called R3CEV. This is a New York based startup made up of trading and technology executives that is collating data, ideas and financial backing from these firms.
Other tech groups that JP Morgan is involved are the Linux Foundation and Digital Asset Holdings, outlining its commitment to engaging in new technological developments.