According to the Financial Review report, a blockchain platform built by the United States banking giant JP Morgan Bank will be used to tokenize gold bars, permitting the reliable miners to obtain a premium on international markets. It is a proof of new trading opportunities that the technology will create in the future to avoid investors having to buy gold online.
Use of Blockchain: Then and Now
Blockchain is a decentralized, distributed technology that was initially used to record transactions over multiple systems so that the record could not be changed. The distributed ledger technology was used in sectors like healthcare, banking and aviation.
Later it found use in creating Bitcoin; and other cryptocurrencies followed.
It is, now, exploring the scope of production among Major investment banking giants. Though it is not utilized to move cash, investment banks are utilizing it to develop information efficiencies instead, in order to handle global liquidity and built crypto assets.
The Development of Quorum
The global investment bank built an enterprise version of the Ethereum blockchain, called Quorum. It permits users to operate smart contracts that automate processes based on pre-programmed rules.
The Quorum blockchain was built via JPMorgan’s collaboration with Ethereum Alliance. The functionality of Quorum in a private blockchain installation was obtained by using battle-tested technology from the Core OS.
Ethereum is more decentralized blockchain than any other organization applications. However, Quorum has been embraced for financial services users to offer high-grade performance and privacy.
The head of blockchain initiatives at JPMorgan in New York, Umar Farooq, said that they are the only financial players who possess the whole stack, from the protocol to the application.
Tokenizing Assets
In tokenizing assets, Quorum uses blockchain technology to efficiently digitize them so that they can be moved to distributed ledgers. This point evolved as the main topic at the Sibos conference that was held in Sydney last week.
The Development of blockchain platform ‘Quorum’ is for tokenizing gold bars. It will permit trading directly among the entities without the involvement of any third party including a broker or exchange.
Mr. Umar stated that tokenization could provide more opportunities for global traders and there are individuals outside the company utilizing Quorum to tokenize gold. They initially wrap a gold bar into a tamper-proof case that is electronically tagged. Later they can track the gold bar from the mine to the endpoint.
The real intention of JP Morgan behind the creation of this blockchain platform is to overcome the obstructions which lead to cash getting stuck in transactions.
About JP Morgan
JP Morgan is the world’s largest and most valuable bank by market capitalization. The Bank is headquartered in New York and the total assets are valued at $2.534 trillion. With such incredible financial assets and kitty under its management, the global investment bank has been considering the potentials of the blockchain technology on how to remove unnecessary maintenance costs and use the benefits of smart contracts in their daily business.
In early 2018, the US major bank was slammed with a class-action lawsuit for charging users more fees for buying cryptocurrencies without informing them beforehand. The JP Morgan Bank is one among multiple largest banks who consider launching a custodial service for investors who wish to invest in virtual currencies.
