2016-02-23 — wsj.com
J.P. Morgan Chase & Co. is quietly testing technology that underpins the digital currency bitcoin on U.S. dollar transfers between London and Tokyo, part of an effort to boost its spending to deal with emerging threats from Silicon Valley.
The nation's largest bank has been testing the program in recent months to move U.S. dollars for about 2,200 clients between the two financial centers using a version of the "blockchain" technology that underpins bitcoin, said Daniel Pinto, head of J.P. Morgan's corporate and investment bank. The bank wants to see whether the blockchain technology, known as the "distributed ledger," can be repurposed for currency clearing and settlement to give clients faster turnaround times and reduce the bank's risk.
It may start using blockchain for live transactions later this year.
J.P. Morgan and other big banks are dealing with growing threats from online lenders and payment systems, including some that use blockchain or bitcoin. Technology represents a rare instance where the bank is increasing spending. J.P. Morgan is more broadly cutting costs, shedding staff and shrinking assets to adjust to an environment of leaner profit margins and tougher regulation.
J.P. Morgan is also participating in several industry groups that are focused on developing blockchain as a way to improve efficiency in lending and trading, among other things. Those groups include R3, the nonprofit Linux Foundation and Digital Asset Holdings, which is led by former J.P. Morgan executive Blythe Masters.
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