- According to a report by the news agency Reuters, the financial giant JPMorgan is in active negotiations with the Ethereum development studio ConsenSys.
- According to the report, a merger of the development unit “Quorum” of JPMorgan and ConsenSys could be in the offing.
Reuters reports that JPMorgan’s blockchain development unit “Quorum”, according to “information from people familiar with the plans”, is discussing a possible merger with Ethereum’s development studio ConsenSys. JPMorgan currently employs a development team of nearly 25 people for Quorum. Th eteam builds products on the Ethereum blockchain and last year launched JPM Coin, which was previously reserved for private companies. The JPM Coin is a stable coin, like Tether, which is linked to the value of the USD.
Quorum forms the basis of JPMorgan’s Interbank Information Network (IIN), which has been expanded to a network of 320 banks that exchange global payment data via the blockchain. The joint development of new blockchain-based products could therefore have far-reaching effects on the banking landscape in the United States.
JPMorgan has already been thinking for two years about spinning off Quorum from the company, setting up an open source foundation or merging with another company such as ConsenSys. According to Reuters, ConsenSys is a good fit with JPMorgan as both companies are working on the further development of the Ethereum ecosystem or researching products based on it.
ConsenSys is a well-known blockchain start-up that grew rapidly during the last Bull Run in 2017 and was created by Ethereum co-founder Joe Lubin. Just last week the company announced that it will lay off approximately 14% of its employees and is planning an internal restructuring. In particular, the software development business has been separated from future venture activities.
A merger of Quorum with ConsenSys would transform the company into a modern development community of Ethereum and thus probably open up great opportunities for JPMorgan to offer the blockchain for its own business processes or for external services. Quorum is open source, so the code is freely available to everyone and the source code can be freely adapted, modified and distributed. Reuters further describes that the negotiations are likely to continue, as the merger talks have only recently begun.
Increasing trend: large financial companies are buying innovative Fintech start-ups
Most recently, Visa announced the acquisition of Plaid, a financial services platform. The takeover by the payment giant is endowed with 5.3 billion dollars, twice the value of the last valuation of the start-up. The purchase is expected to be completed within the next 6 months, subject to regulatory approval.
The merger of the two companies could fundamentally change the landscape for other cross-border payment platforms such as Ripple (XRP) and Stellar Lumens (XLM). Plaid is one of the leading companies in this sector. The company’s services extend to 11,000 financial institutions and more than 2,600 Fintech developers in the United States alone. Both the acquisition of Plaid and the merger talks between JPMorgan and ConsenSys show that the block chain and cryptocurrencies have arrived in the mainstream.