December 22, 2023
By Sharan Kaur Phillora
As we head into 2024, major financial firms like JPMorgan and the Hong Kong and Shanghai Banking Corporation (HSBC) are significantly increasing their involvement in blockchain technology, marking a notable shift in adopting distributed ledger technology (DLT) within the traditional finance sector. This move reflects a broader trend among financial institutions recognizing the potential and efficacy of blockchain technology.
Here’s what we know:
JPMorgan has been particularly active, executing its first decentralized finance (DeFi) trade on a public blockchain on November 3. Following this, the company introduced programmable payments for its institutional blockchain platform, JPM Coin, on November 10. Later in the month, executives from JPMorgan and Apollo unveiled plans for a tokenized enterprise mainnet.
Similarly, HSBC is making strides in the adoption of blockchain. On November 1, in collaboration with financial services provider Ant Group, HSBC tested tokenized deposits under a sandbox arrangement facilitated by the Hong Kong Monetary Authority. A week later, HSBC partnered with Metaco, a Ripple-owned tech firm, to hold tokenized securities on its new custody platform.
According to Sandy Kaul, an executive at asset manager Franklin Templeton, this acceleration in the adoption of blockchain technology is evident and marks the first time a clear pathway to reengineering the global financial markets can be seen
Franklin Templeton manages over $1.5 trillion in assets and has also been actively involved in the blockchain space. The firm launched a mutual fund on the Polygon blockchain earlier this year and applied for a spot Bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC) in September 2023.
While large firms like JPMorgan and HSBC are making significant moves into blockchain, others, such as MoneyGram, have adopted a more measured approach. MoneyGram CEO Alex Holmes revealed that only about 20 of its employees are dedicated full-time to blockchain efforts, a decision proportionate to the company’s expectations around revenue and profitability from this technology.
The growing adoption and application of blockchain in major financial institutions herald a significant evolution in the finance industry, potentially paving the way for a more efficient, transparent, and decentralized financial system.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
