Banks to Choose Bitcoin Over Blockchain with JP Morgan Selling Enterprise Blockchain Quorum

Banks consider its bitcoin over blockchain. Bitcoin have significant advantages in banks in various areas.

By · Aug 27, 2020 . 6min read

JP Morgan sells Quorum

Yesterday, Wall Street announced that J.P. Morgan sold Quorum to ConsenSys. Quorum is the enterprise blockchain that the bank spent years developing. ConsenSys is a Brooklyn-based blockchain software firm run by Ethereum co-founder Joseph Lubin. It was an impressive move by the bank, which has been progressing more towards the world of cryptocurrencies. Last year, J.P. Morgan announced its blockchain-based payment system, JPM Coin, and is now banking crypto exchanges like Coinbase and Gemini.

The progressive attitude towards digital currency is a far cry from the “Bitcoin Bad, Blockchain Good” tune that bank leaders were versifying just three years ago. However, this does not come as a surprise. Moreover, cryptocurrency and tech stocks, like risk assets, are the best things to come out of 2020. 

As Catherine Coley, CEO of major crypto exchange Binance’s U.S. arm, says Bitcoin exceeded other winners, including Apple, Amazon and Microsoft stocks, and real estate, over the past decade. “When the best performing asset doesn’t even exist in traditional banking models, banks get interested,” she writes in Fortune.

Giants like Goldman Sachs and JP Morgan in Crypto and Blockchain

Goldman Sachs has also been unobtrusively revamping its digital assets and cryptocurrency team. This February, Goldman lost Rana Yared, who was attending to lead its blockchain and crypto efforts. However, earlier this month, Goldman announced it had hired a new global head of digital assets, Mathew McDermott. “It definitely feels like there is a resurgence of interest in cryptocurrencies,” McDermott told CNBC.

However, J.P. Morgan is keeping an early foot in blockchain tech. It is strategically investing in ConsenSys as part of the Quorum spinoff. “We look forward to continuing our multifaceted partnership with J.P. Morgan for many years and ushering in an era of enterprise and mainnet compatibility,” Lubin said in a statement. However, it may also end the era of banks trying to build their blockchains—which, some would argue, were never really blockchains at all.

Conclusively, crypto like Bitcoin have significant advantages in banks in several areas. The areas include security, borderless transaction settlement, efficient payment clearance, and lack of dependence on centralized service providers or entities. The banks choosing bitcoin over a blockchain can open up new avenues for both bankers and customers.

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