Part of the job of working in this space is keeping your ear to the ground. What news gets picked up, what is shared among social media accounts and which developments cause ‘thought leaders’ to compose long LinkedIn newsletters offering their ‘hot take’ on whatever is the main topic of chat during the conference season.
While the wider world is drinking up bits and pieces from the collapsed marriage of a former boy band member and the Queen of the North, our industry has been watching the reports that JPMorgan is developing a blockchain-based solution for cross-border transactions.
In numerous press reports, the JPMorgan-developed infrastructure to run the new deposit token will support corporate clients and is waiting on approval from regulators in the US.
This reported new settlement deposit token is different from JPM Coin, a stablecoin, which is the inaugural product from Onyx by JPMorgan. Onyx provides a blockchain-based platform for wholesale payments transactions. JPM Coin is a permissioned system that serves as a payment rail and deposit account ledger, that allows participating JPMorgan clients to transfer US dollars held on deposit with JPMorgan within the system, enabling the movement of liquidity funding and payments in the right time.
I will be interviewing Umar Farooq, CEO of Onyx by JPMorgan and global head of financial institution payments as part of The Banker’s View from Sibos series at the conference in Toronto, Canada next week. Keep a look out for our daily newsletters from Sibos with updates from myself, editor Joy Macknight and Asia editor Kimberley Long.
Despite the commitment that the bank has made towards experimenting and developing blockchain solutions, most of the media attention on this soon-to-be-announced deposit token has come from the sector of the internet that has already drunk the crypto Kool-Aid. At this year’s Euro Bankers Association conference — EBADay — for the second year in a row, the audience, in a poll, did not lend much confidence to digital assets or blockchain-based solutions to solve cross-border payments problems.
Just as every general era has its pop star (#Swiftie4Eva), each banking generation has its institution to watch. In the 1990s, an editor once told me to “always pay attention to what Goldman Sachs is doing, there the industry will go”. However, in the chaotic 2020s I would place JPMorgan in this category. Every move that Jamie Dimon and the top US bank for Tier 1 capital in the US makes creates a buzz.
My views were echoed by social media influencer and advisor Efi Pylarinou:
I’ve been cautious in my observations around cryptocurrencies in the alternative space (I think that is where it will stay). As I have for the role of blockchain (find the problem first), digital assets, stablecoins and the contentious central bank digital currency experiments (why, why and why?) in the traditional space.
However, after 29 years of reporting on and talking to banks, firms like JPMorgan don’t embark on innovation projects like this to look cool. To quote Ms Plyarinou, their moves are “strategic and long term”.
Liz Lumley is deputy editor of The Banker. Follow her on X (formerly known as Twitter) @LizLum
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