Over the past year, much has been said about central banks and the foray into ‘central bank digital currencies (CBDCs). This was made evident in a recent survey by the Bank for International Settlements (BIS), where it was found that roughly 80% of central banks are in the midst of CBDC development. These central banks are not the only ones looking to develop blockchain based services, however. Private banks like JP Morgan, and others, are now joining in on the fun.
In a recent flurry of activity, the following are examples of this taken by various banks, as each looks to develop differing blockchain services.
JP Morgan Chase
Our first example is JP Morgan Chase. It originally announced its plan to create and utilize its very own stablecoin, dubbed ‘JPM Coin’, roughly one year ago. Fast forward to Oct. 27, 2020, and JPM Coin is now being used in the real world, by real clients.
In its first use-case, JPM Coin is being utilized, primarily, as a means for cross-border payments. With fast settlement times and 24/7 access, stablecoins such as this hold the potential to dramatically save users money in such transactions.
United Multistate Credit Co. & Cashaa
As indicated, bank adoption of blockchain is occurring very much on a global scale. While JP Morgan Chase represents this development within the United States, the world’s second largest nation, India, is experiencing the same.
India based United Multistate Credit Co. in conjunction with Cashaa, have announced that they will soon offer clientele various cryptocurrency based services. The following are just two of the various services to be made available.
- Buying/Selling – Bitcoin, Ethereum, Ripple, Bitcoin Cash, and Ethereum Classic
- Collateralized Loans – FIAT loans backed by cryptocurrency holdings
Interestingly, this announcement comes in the midst of a potential ‘crackdown’ on cryptocurrencies within India’s border, by the nation’s central bank. While no decision has yet been announced, the decision of United Multistate Credit Co., would indicate that it expects an eventual favorable outcome.
Our third example of the day comes fresh out of Singapore. DBS, one of the largest banks in Asia, was recently found to have pre-emptively posted new information online surrounding upcoming services by mistake. While the information has since been taken down, internet sleuths had ample time to review DBS’s upcoming plans. These include the following,
- Buying/Selling of cryptocurrencies
- Custodial services through ‘DBS Digital Custody’
- Hosting of security token offerings
These services will provide extra appeal to clientele, as DBS is a regulated company by the Monetary Authority of Singapore – meaning users of the services will benefit from higher levels of security and trust.
Interestingly, each of the examples provided today represents more than just growth in blockchain – they represent a significant shift in sentiment and adoption within an industry that has historically been, not impartial, but opposed to the technology.
In particular, Jamie Dimon, CEO of JP Morgan Chase, has been noted as saying in the past that Bitcoin is a ‘fraud that would blow up’. Analysts at the company now recognize the massive potential behind such cryptocurrencies, noting its growing popularity among younger generations stating, “The older cohorts prefer gold, while the younger cohorts prefer Bitcoin as an ‘alternative’ currency”
This, combined with actions by the Supreme Court of India, paints a global picture in which traditional banks are not only warming up to blockchain endeavors, but racing to establish new services.