Simon Morris of ConsenSys on its efforts to spread the word about Ethereum blockchain technology to private and public banks.
Simon Morris, ConsenSys
By most indicators, the past 12 months have been a period of profound transformation for ConsenSys. The Ethereum blockchain technology company has registered a number of milestones, from the restructuring of its business to distinguish its software business from its venture activities, to the acquisition of JPMorgan’s blockchain platform, Quorum, to partnerships with leading central banks to develop digital currencies. Taken together, they illustrate the swift maturation of a company that began life seven years ago and today is a global presence in the blockchain technology space.
Though ConsenSys’s work cuts across several domains, it aligns with a single mission: the nourishment of the Ethereum ecosystem. As the largest programmable blockchain in the world, Ethereum has pulled developers, enterprises, institutions and individuals into its orbit since being co-created by Joseph Lubin, the founder of ConsenSys, in 2014. In the intervening years, Ethereum has outstripped the competition in terms of developer activity.
“You have this incredible gravity well of attention being paid to innovating, from the most research-oriented cryptography primitives, all the way into more applied uses of it with the flowering of decentralised finance. It’s just attracted so much attention. There’s so much talent and so many tools available in the space,” says Simon Morris, chief strategy officer at ConsenSys. “The evolution of serious financial projects on top of Ethereum have matured to the point now where institutions and regulatory bodies and governments are actually paying attention – they realise they need to react.”
Evolving ecosystem
To drive innovation across the ecosystem and streamline its work, ConsenSys delineated its core technology and software business from its investment efforts in 2020. The outcome has led to a cut in the company’s headcount by about 14%, but will help ConsenSys to better serve its customers on the one hand and keep pace with market developments on the other. It comes at a time when the evolution of the wider Ethereum ecosystem is occurring at breakneck pace.
Both private and public sector enterprises and institutions are engaging with ConsenSys to further their work in the Ethereum space. In August 2020, ConsenSys acquired JPMorgan’s blockchain platform, Quorum, which is built on the Ethereum network, that runs an interbank payments network involving hundreds of lenders.
If you’re a central bank making the transition to a CBDC, you want to have a great deal of assurance that the technology you’re considering is both enterprise and institutionally ready
In turn, JPMorgan made an undisclosed strategic investment in ConsenSys. In addition, a commercial agreement was reached between the two parties that involved ConsenSys providing support to JPMorgan for the bank’s ongoing blockchain-related projects.
Developing CBDCs
ConsenSys has also entered into some agreements with central banks to assist in the development of central bank digital currencies (CBDCs). In October 2020, the Bank of Thailand selected the company as its technology partner to explore the possibility of blockchain technology in a proof-of-concept prototype for a retail CBDC in the country.
The business cases to be tested include the simulation of daily commerce and the automation of payments, among other examples. Beyond the domestic market, ConsenSys is working with both the Bank of Thailand and the Hong Kong Monetary Authority to test the application of a CBDC in cross-border payments.
Elsewhere in the region, the Reserve Bank of Australia has partnered with ConsenSys and leading national banks, including the Commonwealth Bank of Australia and National Australia Bank, to test the potential of a wholesale form of CBDC.
“In [all of] these cases the interest is in Ethereum as the underlying technology,” says Mr Morris. “So if you’re a central bank making the transition to a CBDC, you want to have a great deal of assurance that the technology you’re considering is both enterprise and institutionally ready. It has to be battle hardened but it is also free from being captured by a commercial interest.”
When it comes to CBDC development, ConsenSys has a track record, having also worked with the South African Reserve Bank, the Monetary Authority of Singapore and, more recently, the Banque de France through its partnership with French lender Société Générale.
As public institutions, private enterprises and individuals alike march towards a future of decentralised finance, it is a good bet that ConsenSys, and the Ethereum blockchain that it champions, will be at the forefront of this new financial and monetary dawn.
