A major merger between the world of traditional finance and blockchain could soon be on the cards according to reports. JPMorgan, the United States’ largest bank, is said to be in conversation with major Ethereum-focused firm ConsenSys.
The report in Reuters, which is based on unnamed sources, suggests that the merger will see the Bank’s marquee blockchain unit Quorum link up with ConsenSys, a firm run by Ethereum co-founder Joseph Lubin. It is said the details will be hashed out in the next six months.
It is uncertain if the merger will see some 25 people working under Quorum joining the ConsenSys team, but the tie of the bank’s blockchain to Ethereum has certain advantages for the advancement of financial decentralized networks and financial tools on the blockchain.
JPMorgan’s CEO famously slated Bitcoin and the cryptocurrency space before the bank came out with Quorum, which underlies JPMorgan’s Interbank Information Network (IIN). This network has been expanded to comprise a network of 320 banks sharing global payments data over the blockchain.
More so, JPMorgan also announced the creation of its own cryptocurrency, the JPMorgan coin, which is set to be used to settle interbank transfers. However, it is being reported that the merger with ConsenSys would impact neither the course of the IIN or the JPM Coin.
Rather, with JPMorgan reaching a juncture as to what it wants to accomplish with Quorum, including, establishing a dedicated open-source foundation, creating a new startup or pursuing a merger, the merger with ConsenSys seems to be the right choice.
What is rather concerning though is that ConsenSys has been in the news of late due to job cuts. Early this month, it was announced that they would be further cutting 14 percent of staff as part of a restructuring that will separate the firm’s software development work from venture activities.
However, having closer links to Ethereum appears to be a good move for a banking blockchain as the most recent developments on Ethereum show it is being heavily utilized for decentralized finance. (DeFi)
A recent milestone has seen $1 billion locked into DeFi applications, and this has come quickly as the interest in DeFi applications on Ethereum has recently spiked. This could indicate that Ethereum is finding a ‘killer application’ within decentralized finance, and for JP Morgan, this would be a boost to their desires in using blockchain.