J.P. Morgan Chase has established a new business unit dedicated to blockchain and digital currency work, a move that coincides with the recent profitability of its stablecoin, according to a CNBC report on Tuesday (Oct. 26).
The new business unit — Onyx — has a dedicated staff of 100 and is being led by Umar Farooq, who will serve as chief executive officer.
JPM Coin launched in 2019 and for the first time has a paying client, a large technology firm, said Takis Georgakopoulos, the head of global wholesale payments.
“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” Georgakopoulos told CNBC.
J.P. Morgan moves in excess of $6 trillion daily across 100 countries and is among the biggest firms in the industry. The bank has been researching solutions to streamline wholesale payments and save the industry millions, said Georgakopoulos.
Paper check processing is another area that could save banks money if streamlined. Currently, it takes several people at physical locations to process checks. Georgakopoulos believes it can be managed with a digital exchange of information, completely bypassing the mail.
“We’re talking about hundreds of millions of checks being sent,” Georgakopoulos said. “Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75 percent of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”
J.P. Morgan started to expand its use of blockchain technology last year, with the intention of improving the banking industry’s payment system and encourage FinTechs to experiment with platform development.
PayPal recently announced that it will soon offer customers the ability to buy, hold and sell crypto. Starting in early 2021, ethereum, Bitcoin Cash and litecoin will be able to be used to transact at 26 million merchants across the company’s network.
