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Ripple CEO Says JPM Coin Lacks Interoperability: ‘Just Use the Dollar, I Don’t Get It!’

Ripple CEO Brad Garlinghouse says the recently-announced stablecoin from U.S. banking giant JPMorgan Chase lacks interoperability.

Ripple (XRP) CEO Brad Garlinghouse says the recently-announced digital asset from United States banking giant JPMorgan Chase lacks the interoperability that would make it a significant innovation. Garlinghouse made his remarks during an interview at the 4th Annual DC Blockchain Summit in Washington D.C. on March 6.

As Cointelegraph has reported, JPMorgan Chase announced the forthcoming launch of its new blockchain settlement offering in mid-February: a stablecoin dubbed JPM Coin, to be backed 1:1 by the bank’s USD reserves.

Alluding to multiple industry commentators’ suggestions that the bank’s coin could be a direct competitor to Ripple’s XRP, Garlinghouse dismissed the coin’s usefulness due to the fact that it remains a proprietary in-house asset, and that its exclusivity is likely to lead each major bank to issuing its own coin. This, according to him, will lead to the exact same fragmentation that characterizes the financial services industry today:

“This guy from Morgan Stanley was interviewing me last week, and I asked him, so is Morgan Stanley going to use the JPM Coin? Probably not. Will Citi use it? […] Will PNC? And the answer is no. So we’re going to have all these different coins, and we’re back to where we are: there’s a lack of interoperability.”

Garlinghouse further weighed in on JPM Coin’s apparent exclusivity, quipping that:

“Let’s think about this. [JPM] announced the JPM Coin for institutional customers. If you give them a dollar as deposit, they’ll give you a JPM Coin, that you then can move in the JPM ledger. Wait a minute, just use the dollar! I really don’t understand […] what problem that solves.”

Throughout the interview, the sole thing that Garlinghouse conceded to JPM Coin was the potentially positive effect “for the blockchain and crypto industry to have players such as JPM leaning in.” “That’s the one good thing I’ll say about this,” he joked.

As previously reported, the research arm of top crypto exchange Binance has similarly judged that as a proprietary and centralized network, JPM Coin is unlikely to be tapped by competitors in the banking sector, who may well choose to release their own native digital tokens in future.

In terms of inter-bank settlement, Binance Research further argued that as a closed network solution, JPM Coin is for now unlikely to directly compete with XRP — given the latter’s ambition to serve as a multi-bank “mediator currency between both fiat/crypto currencies and any fiduciary product.”

Binance nonetheless stated that internally, JPM Coin could have a significant material impact in improving the cost and time efficiency of traditional financial services.

Garlinghouse has previously stated that JPM Coin “misses the point” of crypto, arguing that introducing a closed network today is like launching AOL after Netscape’s IPO.

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Hodler’s Digest, Feb. 25–March 3: Top Stories, Price Movements, Quotes and FUD of the Week

Facebook is getting serious about crypto, Samsung’s new smartphone will support more cryptos, and more in this Hodler’s Digest.

Top Stories This Week

Nasdaq Begins Listing Brave New Coin’s Bitcoin and Ethereum Price Indexes

Nasdaq, the world’s second-largest stock exchange, began its live listing of two crypto price indexes from United States blockchain and crypto market data company Brave New Coin (BNC) this week. The listings, which had been announced earlier this month, are BNC’s Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX). According to the announcement, the indexes will show reference rates for the price of 1 BTC and 1 ETH, quoted in USD and refreshed every 30 seconds. Brave New Coin has also announced future plans to add another index for tracking the price of Ripple (XRP).

Samsung Announces Galaxy S10 Crypto Partners, Bitcoin and Ethereum Support

South Korean tech giant Samsung’s new Galaxy S10 smartphone will reportedly have crypto wallet functions for both Ethereum and Bitcoin, as well as two other tokens. The much-discussed crypto features seemed to have been revealed at the Mobile World Congress this week, where Samsung presented the various projects featured on the smartphone, including support for the cosmetic industry-focused COSMEE token (COSM) and crypto gaming-focused Enjin’s token (ENJ). Also this week, anonymous sources had reported that Enjin Wallet would be backing a blockchain wallet in Samsung’s new smartphone.

Jamie Dimon Says JPM Coin Could Eventually Find Consumer Use

Jamie Dimon, the CEO of JPMorgan Chase, said this week that the company’s previously announced JPM Coin could eventually see consumer use. The bank’s proposed digital asset had been announced by the U.S. banking giant last week, noting that the coin could increase settlement efficiency in several of its operations. However, Dimon’s comments to CNBC this week implied a wider focus for the coin’s use, as he noted that it “could be internal, could be commercial, it could one day be consumer.” The JPM Coin has been both lauded and opposed by those in the crypto community, with some suggesting it defeats the purpose of crypto itself.

New York Times: Facebook Reportedly Shopping ‘Facebook Coin’ to Crypto Exchanges

Social media giant Facebook is reportedly “hoping to succeed where Bitcoin failed” with its highly secretive cryptocurrency project, according to anonymous sources speaking to the New York Times. This week, the Times wrote more about Facebook’s alleged coin that had previously been revealed, noting through its sources that the company planned to integrate WhatsApp, Messenger and Instagram into one entity and provide the newly unified service with a crypto token. According to the unnamed sources, Facebook is far enough along in the project that they have been meeting with crypto exchanges about the possibility of listing the so-called “Facebook Coin.”

Ethereum’s Constantinople and St. Petersburg Upgrades Have Been Activated

Ethereum’s next two network upgrades, known as Constantinople and St. Petersburg, have successfully taken place this week on the main network at block 7,280,000, in accordance with the previously released schedule. The two updates have been combined into one event, following the delay of the Constantinople upgrade in January over a newly discovered security vulnerability. While Constantinople adds the so-called “difficulty bomb” and the decrease of Ethereum’s block reward, St. Petersburg is meant to delete a previous update, Ethereum Improvement Proposal 1283, from Ethereum’s test networks, as the EIP has been identified to have security vulnerabilities.

Winners and Losers

The crypto markets are slightly down by the end of the week, with Bitcoin trading at around $3,854, Ethereum at $134 and Ripple around $0.31. The total market cap is at about $130 billion.

The top-three altcoin gainers of the week are RegalCoin, Archetypal Network and President Trump. The top-three altcoin losers of the week are ICE ROCK MINING, PonziCoin and CapdaxToken.

Winners and Losers

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“Let’s do this in Europe, the avant-garde of agricultural technology, by developing tools that will track every product from raw material production to packaging and processing. The innovation is there and it must be used in the agricultural world, it must be fully used because it is at the service of shared excellence and it will serve the consumer.”

Emmanuel Macron, president of France

 

“You can stare at it [Bitcoin] all day, and no little Bitcoins come out or anything like that. It’s a delusion, basically.”

Warren Buffett, CEO of Berkshire Hathaway

 

“I’m not sure I can buy that we’ve seen massive value destruction, I think we’ve seen massive value creation.”

Steve Wozniak, Apple co-founder

“JPMorgan Coin could be internal, could be commercial, it could one day be consumer.”

Jamie Dimon, JPMorgan Chase CEO

 

“We’re happy to go on the record. Coinbase’s listing of XRP (also, not ‘our token’) was Coinbase’s independent decision – we did not give them anything to make it happen.”

Miguel Vias, head of XRP markets

FUD of the Week

QuadrigaCX Wallets Have Been Empty, Unused Since April 2018

In further QuadrigaCX news, the embattled Canadian crypto exchange’s auditor — Big Four audit firm Ernst & Young (EY) — released a report this week showing that the exchange’s cold wallets appear to have been empty since April 2018. EY identified six separate crypto wallets that had been used to store Bitcoin, but noted that there had been no deposits in the wallet since April of last year (besides one for $500,000), noting that they cannot find a reason as to why the wallets had been ceased. EY also included in its report the discovery of 14 user accounts that appear to have been created outside the normal process by Quadriga, which were then used to trade on the exchange’s platform.

Crypto Mining Service Coinhive to Shut Down Operations in March

Coinhive, a crypto mining service that specifically targets altcoin Monero (XMR), has announced that it will be shutting down operations in March 2018. According to the blog post, the project has become economically inviable due to the market conditions, as well as the more than 50 percent drop in hash rate following the last Monero hard fork. XMR has dropped around 85 percent over the course of the year, the blog post noted, underlining that it contributed to the decision to discontinue Coinhive. The service is a JavaScript-based digital currency mining service that relies on computer code being installed on websites, that then uses some of a browser’s computing power to mine.

Netherlands Bitcoin Trader Attacked in His Home

According to local media, a Bitcoin trader was attacked in his home in the Netherlands this week by a group of robbers that had disguised themselves as police. The victim, 38-year-old Tjeerd H., was robbed by a group of criminals wearing balaclavas and bulletproof vests with a police coat, who threatened him with firearms. According to the local media outlet, H. was a cryptocurrency trader, and police sources have confirmed this. As cryptocurrency has risen in popularity in recent years, attacks on traders have also risen in number, as Cointelegraph has previously reported.

Best Cointelegraph Features

#DeleteCoinbase: Exchange Users Respond to Acquisition of a Firm Run by Former Spyware Developers

After Coinbase’s acquisition of blockchain startup Neutrino this month, users have taken to the internet in order to lambast what they see as the company’s lack of sensitivity to human rights issues. The online #DeleteCoinbase campaign stems from the fact that some of Neutrino’s employees are associated with Hacking Team, an information tech outfit that has reportedly sold surveillance capabilities to different governments. Cointelegraph takes a look at the crypto community’s response to this controversial acquisition.

Scammers, Satoshi and Tesla Miners: Elon Musk’s Complex Relationship With Crypto

Elon Musk, Tesla CEO and overall tech entrepreneur, recently complimented Bitcoin’s structure, calling the coin a “quite brilliant” digital currency. Cointelegraph examines Musk’s relationship with cryptocurrency, starting from October 2014 up until present day, as the entrepreneur previously has rarely made direct comments about crypto technology.

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Binance Research: JPM Coin Unlikely to Directly Compete With Ripple’s XRP, for Now

Binance Research argues that the implications of JPMorgan Chase’s JPM Coin for the public stablecoin market will be minimal in the near-term.

The research arm of top crypto exchange Binance has published an analysis of JPMorgan Chase’s newly announced stablecoin, arguing that the digital coin brings “minimal direct competition” to Ripple’s XRP token in the near term. The study was published on March 1 by Binance Research.

As Cointelegraph has reported, JPMorgan Chase announced the forthcoming launch of its new blockchain settlement offering in mid-February: a stablecoin dubbed JPM Coin, to be backed 1:1 by the bank’s USD reserves.

As Binance Research notes, the JPM Coin pilot project will initially focus on settlement and value transfer between financial institutions and is to be issued on the private, permissioned Quorum blockchain network — a fork of the public Ethereum (ETH) blockchain.

In terms of inter-bank settlement, JPM Coin is also purportedly for now unlikely to directly compete with Ripple’s XRP token — given the latter’s ambition to serve as a multi-bank “mediator currency between both fiat / crypto currencies and any fiduciary product,” as opposed to JPM Coin’s currently closed network solution.

Taking stock of the bank’s vast global client base and $2.6 trillion balance sheet, Binance Research suggests that JPM Coin “could make the institution the largest stablecoin issuer on a blockchain measured by circulating supply and total market cap.”

The coin, the study continues, is poised to become a potential “precursor to the third generation of stablecoins,” which will target the world of traditional finance and aim to serve particular purposes and business use cases by means of private blockchain-powered tokens.

In the study’s schema, the first generation was spearheaded by stalwart coin Tether (USDT), later followed by a steady stream of “second generation” new stablecoins over the course of 2018.

According to the study, while JPM Coin may have significant material impact in improving the cost and time  efficiency of traditional financial services, the study continues, its implications for the public stablecoin market will in the short term be minimal:

“Large banks and financial institutions […] have a distinct set of advantages in issuing fiat-collateralized stablecoins, but these offerings will not displace liquid, publicly traded stablecoins in the near-term given their closed ecosystems built on private blockchains.”

Moreover, as a proprietary and centralized network, JPM Coin is unlikely to be tapped by competitors in the banking sectors, who may well release their own native crypto tokens in future, the study contends.

As reported, JPMorgan Chase CEO Jamie Dimon this week suggested that JPM Coin could eventually find consumer use and evolve beyond internal use cases.

Stablecoin innovation continues to gain global traction — with banking titans such as Japan’s Mizuho Financial Group and Mitsubishi UFJ Financial Group both set to launch their own yen-pegged tokens.

Meanwhile, unconfirmed reports suggest that Facebook is also developing its own fiat-collateralized crypto, to be integrated into its messaging services.

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JPMorgan’s Balancing Act Between Blockchain and Crypto

Multinational investment bank JPMorgan Chase has had a chequered relationship with cryptocurrencies over the years. While it has maintained an apparent apathy toward Bitcoin and the likes, the financial institution has openly embraced blockchain technology and is actively using it in various internal projects.

This has come to the fore in August 2018, as chief information officer Lori Beer made a bold statement in an interview, claiming that blockchain technology ‘will replace’ existing financial systems in the next few years.

Beer’s sentiments come at an interesting time, especially considering JPMorgan’s yin-and-yang attitude towards decentralized ledger technology (DLT).

Blockchain technology underpins the existence of cryptocurrencies, which have multiplied in number and applications since Bitcoin was birthed in 2009. Therefore, it is worth taking a trip down memory lane to understand the juxtaposition between the company’s attitude toward cryptocurrencies and blockchain technology.

JPMorgan’s love/hate relationship with crypto

As has been the case with most financial institutions, the emergence of cryptocurrencies has been met with a certain element of trepidation. Some have been more accepting than others, but JPMorgan has had one of the more interesting stories to tell.

The company hasn’t been overly opposed to the notion of cryptocurrencies, but its leadership — CEO Jamie Dimon, in particular — has been nothing short of hypercritical over the past few years. As we will delve into, this has caused a contrasting narrative in terms of the company’s projects and exploits in the space when compared with the opinions of Dimon.

Quorum

In November 2016, JPMorgan published a white paper for Quorum, which is a private blockchain platform built on the Ethereum protocol.  

As a founding member of the Enterprise Ethereum Alliance (EEA), JPMorgan’s development of Quorum is aligned with the mandate of the EEA, which aims to bring privacy, scalability and security to the Ethereum blockchain. This is directly aimed at enterprises that want to control the accessibility and use of data through a blockchain system.

Quorum’s blockchain looks to provide data privacy to companies, using the Ethereum network to validate transactions, which was described in the opening paragraph of the white paper:

“Though the design is simple, the solution preserves many of the key attributes of Ethereum, such as ensuring every node on the network participates in and increases the overall security of the entire network while only revealing the details of private transactions to those party to the transaction.”

Quorum uses cryptography to protect sensitive data, only allowing those with the necessary permission to access certain transaction data.

Almost a year-and-a-half later, on April 20, 2018, JPMorgan finally tested the Quorum blockchain with a number of high-profile banks participating.

JPMorgan is even considering divorcing Quorum from the company, in an effort to make the platform more accessible to the markets. A barrier to entry is the fact that market competitors are unlikely to use a platform that is run by a competitor bank.

Topsy-turvy 2018

As cryptocurrencies endured a humbling correction in the months after Bitcoin’s all-time high in December 2017, JPMorgan — among other banks — stopped processing cryptocurrency purchases with its credit cards, citing the volatility of the markets.

By the end of February, the bank delivered its annual report to the U.S. Securities and Exchange Commission (SEC). The report added cryptocurrencies to its sections on ‘Risk Factors’ and ‘Competition,’ illustrating the disruptive aspects of the space.

The company told the SEC that the emergence of cryptocurrencies would require the bank to spend more money adapting its products to appease clients and customers, with the possibility of the bank eventually losing market share:

“Both financial institutions and their non-banking competitors face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies, that require no intermediation.”

In May 2018, the company announced the creation of the position of a head of crypto assets strategy at the company. The post was immediately filled, with Oliver Harris the man in charge of leading the company’s new cryptocurrency projects. It is understood that Harris’ position would not involve the trading of cryptocurrencies, but rather investigating the use of cryptocurrency and blockchain services that could benefit JPMorgan’s processes.

Around the same time, vice president Daniel Pinto said the company was looking into the Bitcoin space — admitting interest in the futures markets in an interview with CNBC. Pinto went as far as saying they would clear Bitcoin futures if they had to, while also saying that cryptocurrencies faced a number challenges:

“I have no doubt that in one way or another, the technology will play a role. [Regarding Bitcoin], you cannot have something where the business proposition is to be anonymous and to be the currency for unknown activities. That will have a very short life because people will stop believing in it, or the regulators will kill it. I think the concept is valid [and that’s why] you have many central banks looking into. The tokenization of the economy, for me, is real. Cryptocurrencies are real but not in the current form.”

Jamie Dimon

JPMorgan CEO Jamie Dimon has long been a harsh critic of Bitcoin and cryptocurrencies. Dimon’s dissenting attitude dates back to 2015, when he said that Bitcoin would be stopped and that blockchain “is like any other technology.” Furthermore, Dimon made it clear that the bank would use the underlying technology to better its own systems:

“If it is cheaper, effective, works and secure, then we are going to use it. The technology will be used, and it could be used to transport currency — but it will be dollars, not Bitcoins.”

Dimon’s most infamous critique of Bitcoin came in September 2017, when he labelled the cryptocurrency a fraud. The JPMorgan CEO went as far as threatening to fire employees that were offering to trade cryptocurrencies on behalf of their clients.

Dimon’s commentary on the subject ebbed and flowed in the following months, as his own views on the sector were seemingly at odds with the plans of the company. Dimon went as far as saying he wouldn’t make any more comments on Bitcoin, with JPMorgan adopting an ‘open-minded’ approach to cryptocurrencies.

In the lead up to the launch of the first-ever Bitcoin futures contracts in December by the Chicago Mercantile Exchange, the company even considered facilitating access to trading futures.

JPMorgan global market strategist Nikolaos Panigirtzoglou furthered the dividing opinions between the company and its CEO, writing in a note to investors that the launch of Bitcoin futures would drive the legitimization of the cryptocurrency:

“The prospective launch of Bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors.”

Dimon seemingly changed his tune in 2018, saying he was not really interested in the subject in a January interview, while admitting he regretted his 2017 ‘fraud’ remarks.

A few weeks later, at the World Economic Forum in Davos, Dimon told Cointelegraph that he ‘was not a skeptic’ of cryptocurrencies.

After a number of months out the spotlight, Dimon made headlines earlier this month, reportedly calling Bitcoin a ‘scam,’ before reiterating he was not interested in the subject during a gala speech.

Dimon was quoted as saying government would move to shut down cryptocurrencies due to a lack of control over the space. This followed an interview with the Harvard Business Review, in which Dimon said that JPMorgan was testing blockchain technology for use in a wide range of applications within the company.

Winds of change

Dimon’s headline grabbing statements have somewhat taken away from the work being done at the global financial institution.

As previously mentioned, the company’s CIO Lori Beer has painted a more accurate picture of the company’s stance on blockchain technology and cryptocurrencies.

Her statements of blockchain’s impending adoption and the effect it will have on a global scale cannot be understated and seems to be a big driving force in JPMorgan’s Quorum project.

As Beer said, the company needed to create a blockchain platform that serves the needs of the company and its many clients:

“We are currently following many paths. We invented a blockchain with an open code based on Ethereum. Actual blockchain technology has not yet resolved issues with privacy and scalability that we needed. We are connected to Hyperledger and Enterprise Ethereum Alliance. The application of this technology in business is more important to us than the technology itself. We are looking not only for cost reduction, but also for opportunities to develop new products.”

The CIO also said that JPMorgan is ‘evaluating’  the current state of the cryptocurrency space, while making it clear that it would only support regulated markets and currencies.

While this doesn’t take the company any closer to being actively involved in the cryptocurrency markets, its appetite for development of blockchain says a lot about the underpinning technology and the promise it has for the financial world.

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JP Morgan CIO: Blockchain Will Replace Existing Technology

JP Morgan CIO Lori Beer said at a press conference in Buenos Aires that blockchain will “replace existing technology” in a few years, according to Argentinian website Cripto247 August 23.

“We will see a greater and wider use of blockchain […] In a few years blockchain will replace the existing technology, today it only coexists with the current one,” Beer said.

Beer explained to Cripto247 that JP Morgan uses blockchain technology to “simplify the payment process and to store customers’ information related to KYC (Know Your Customer) policy.” She added that blockchain technology helps to prevent money laundering. Beer further explained the use of blockchain technology by the bank:

“We are currently following many paths. We invented a blockchain with an open code based on Ethereum. Actual blockchain technology has not yet resolved issues with privacy and scalability that we needed. We are connected to Hyperledger and Enterprise Ethereum Alliance. The application of this technology in business is more important to us than the technology itself. We are looking not only for cost reduction, but also for opportunities to develop new products.”

Beer was also asked about JP Morgan’s position on buying cryptocurrencies. She explained that the bank only supports what is regulated and has specialists who are “evaluating what is happening” with virtual currencies. When asked about the institutional position regarding Initial Coin Offerings (ICOs), Beer preferred not to respond.

Earlier in August, Cointelegraph reported that JP Morgan Chase’s CEO Jamie Dimon was optimistic about blockchain. “[JPMorgan] is testing [blockchain] and will use it for a whole lot of things,” he said.

In May, JP Morgan Chase filed a patent for a blockchain powered peer-to-peer payments network that could be used for intra- and inter-bank settlements. The patent application proposes using a distributed ledger to process payments in real-time, without having to rely on a trusted third party to hold the true “golden copy” of the audit trail.

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Crypto Exchange Revenue May Double In 2018, Despite Market Downtrend

To be frank, the cryptocurrency market hasn’t been in an optimal position since the start of the year, with prices crashing by upwards of 70% after the monumental run-up of 2017. However, according to analysts from Sanford C. Bernstein & Co, an American investment management and research house, crypto exchanges are still expected to post hefty revenues by the end of 2018.

In fact, collective revenues could double to upwards of $4 billion this year in comparison to last year’s figures, even if the market continues to head lower. According to Bernstein’s analyst team, the purchase and sale of cryptocurrencies on spot market exchanges generated an approximate $1.8 billion of fees last year (based off average transaction/trading fees).

To give this figure some perspective, the revenues generated by crypto exchanges are 8% of the fees incurred by investors on legacy market exchanges, an impressing statistic to say the least.

Although some were skeptical of the $4 billion projection, evidence posted by top crypto exchanges seems to tell a different story. As reported by Ethereum World News in early-July, Binance is expecting to rake in nearly $1 billion in profits in 2018 alone, despite the dismal performance of the market in the first 8 months of the year.

Many attributed this substantial figure to the relatively high fees Binance charges, along with the rumored listing fee that some speculate is upwards of $2 million per token. While the latter source of revenue is an ongoing source of controversy, the former has been accepted by the crypto community as fact. For most traders, Binance charges a 0.1% fee for the maker and taker of an order. While a 0.1% fee may sound near-negligible to many, incurred fees can rack up over time, often eclipsing how much a trader may be charged by a traditional markets brokerage, like TD Ameritrade or Charles Schwab.

For many premier exchanges, it is much of the same, with many other crypto-to-crypto platforms charging fees that are comparable to Binance, if not even more. Additionally, exchanges that support fiat-to-crypto even charge additional fees for the deposit and withdrawal of fiat.

Legacy Firms Want In On Crypto, Or Do They? 

Taking the aforementioned statistics and forms of revenue into account, it quickly becomes apparent that this flowering industry remains lucrative. The potential for staggering revenue figures and high-profit margins has led Wall Street veteran firms, like Goldman Sachs and JPMorgan Chase, to metaphorically dip their toes in this budding space. Adding more credence to this thought process, the aforementioned analyst team wrote:

“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms.”

These individuals later noted that traditional firms could make a foray into this industry by providing custodian, asset management, and market-making services to an array of investors.

However, some fear that due to rampant regulatory concerns and rapidly-fluctuating prices that Wall Street firms will be hesitant to make a meaningful move on the market. As such, Coinbase, which accounts for a speculated 50% of the transaction revenue pool, may end up in an “unassailable competitive position” in the future.

While crypto space will undoubtedly continue to develop, it may be a few more years before traditional institutions offer spot market support for the masses.

Image Courtesy of Charles Forerunner

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Bank of Montreal, Teachers’ Pension Fund Trial Canadian Dollar Debt Deal via Blockchain

The Bank of Montreal and Ontario Teachers’ Pension Plan have tested a Canadian-dollar debt deal using blockchain, Bloomberg reports August 15.

In the pilot transaction, the bank is said to have sold $250 million Canadian dollars (around $190 million) of one-year floating rate deposit notes to the teachers’ pension fund, implementing blockchain tech to mirror the transaction. This is reportedly the first use of the technology for a Canadian dollar “fixed-income issue.”

Bloomberg notes that the Bank of Montreal’s BMO Capital Markets unit has built a prototype blockchain-based settlement system, which enables issuers and buyers to track transactions using the technology. The bank reportedly aims to harness the technology to secure major cost savings across compliance, financial reporting, and clearing and settlement of fiat transactions.

Kelsey Gunderson, head of global trading at BMO Capital Markets stated:

“This is an important first step in developing a fully functional blockchain capability that we think will eventually allow primary and secondary trading of securities.”

This year has seen another bullish national first for a similar initiative on blockchain, this time for the U.S. dollar. In April, JPMorgan Chase, the National Bank of Canada and others used the Quorum blockchain platform to mirror the Canadian bank’s $150 million offering “on the same day of a one-year floating-rate Yankee certificate of deposit.”

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Goldman Sachs Leads $32 Million Funding Round for Enterprise Blockchain Startup Axon

Enterprise-focused blockchain startup Axoni has raised $32 million in a funding round led by Goldman Sachs and other high-profile banks and venture capital investors, Forbes reports August 14.

The $32 million Series B funding round was led by Goldman Sachs and Nyca Partners, with numerous other investors including Wells Fargo, JPMorgan, Citigroup, and Andreessen Horowitz. The fresh investment brings Axoni’s total financing to $55 million to date.

Axoni’s co-founder, Greg Schvey, told Forbes that the round represented not just an injection of capital but a “deep strategic” alliance, given that many of the investors are themselves innovating the traditional financial sector by turning to distributed ledger technologies (DLT), such as blockchain.

Goldman Sachs, JPMorgan and Citigroup have already successfully tested Axoni’s blockchain platform Axcore for trading equity derivatives, Forbes reports.  

New York-based Axoni, founded in 2016, reportedly plans to use the capital to help its existing enterprise clients to “integrate their own users” into three of its distributed ledger platforms, now close to completion.

The largest project Axoni currently has underway is with DTCC –– the highest financial value processor in the world, processing $1.6 quadrillion in securities transactions per year. Last year, DTCC had announced it would work with Axoni, IBM and blockchain consortium R3 to re-platform its Trade Information Warehouse for derivatives processing using the Axcore blockchain.

Other notable recent venture capital infusions into the crypto and blockchain space include $28 mln from Andreessen Horowitz and Pantera Capital for securities blockchain platform Harbor, and Rockefeller’s VC Arm Venrock’s partnership with crypto investment group Coinfund.