JPMorgan Sees Debt Issuance As A Blockchain Possibility

JPMorgan is one of the banks that are mostly fond of the blockchain nowadays. Even though the bank distanced itself from cryptocurrencies, it recently joined forces with the National Bank of Canada to develop an application based on the Quorum technology for debt issuance on the blockchain.

From corporate bonds to Treasury bonds and other papers, the biggest US bank will test debt issuance of $150 million of a one-year floating rate as well as a “simulation” of the issuance of the blockchain.

According to the announcement, the new app is designed to perform all of the features that are linked to debt issuance. From origination to distribution, execution, settlement, there will also be coverage on the interest rate and maturity payments. That way, the bank would slash the costs and the need for service providers which are usually paid hefty fees for clearing and settling.

So far, this project attracted many institutional investors such as Goldman Sachs Asset Management (GSAM), the pharma giant Pfizer and a Legg Mason subsidiary named Western Asset.

The project Quorum is an open-source enterprise blockchain which is a version of Ethereum designed for financial institutions. Created back in 2016 by the core Ethereum developer Jeffrey Wilcke, it acts as a “minimalistic fork of the Go Ethereum client”.

According to JPMorgan’s Blockchain Program Lead Christine Moy:

“This is an exciting example of how J.P. Morgan leveraged our combined capabilities in capital markets and blockchain technology, delivering results to a diverse set of clients. We look forward to exploring blockchain-enabled capital markets applications … and how working together on open source technology like Quorum can enable and accelerate this progress.”

In the end, this is not the first project on debt issuance. The UK-based company Nivaura already issued similar notes to retail investors, in conjunction with Microsoft’s Azure cloud technology – functioning on the Ethereum blockchain.