For almost a decade, major banks have harbored ambitions regarding blockchain technology, but progress has been slow and incremental. However, many anticipate a shift this year as experimental projects transition to real-world applications.
To fervent cryptocurrency enthusiasts, the endeavors of banks might seem somewhat mundane. This sentiment was apparent at the recent Digital Assets at Duke conference, where big bank executives expressed optimism about this year marking a turning point towards tangible use cases after years of focusing on the foundational technology. The emphasis primarily lies on enhancing workflows, automating manual processes, and reducing costs.
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Goldman Sachs views blockchain as a means to expedite settlement processes, lower capital expenditures, and establish a secondary market for private assets. The institution has developed GS DAP, a digital asset platform built on a private blockchain, which has been utilized by entities such as the European Investment Bank and the Hong Kong Monetary Authority for bond issuance.
Oli Harris, head of digital assets at Goldman Sachs, underscored the importance of the application layer during a panel discussion at the Duke University conference, emphasizing the creation of value for both the institution and its clients.
JPMorgan Chase, despite its CEO Jamie Dimon‘s skepticism towards cryptocurrencies, sees blockchain’s potential in enhancing payment network infrastructure. The bank is promoting the use of JPM Coin to simplify cross-border payments.
Jeremy Pollack, product manager at JPMorgan’s Onyx Coin Systems, highlighted the current opportune moment in the space, with interoperable and modular systems enabling the development of proof-of-concepts and end-to-end solutions.
Regulatory hurdles have hindered significant progress, but there are hopes for easing regulations in the future. Last week, lawmakers introduced a proposal to repeal SAB121, an accounting guideline by the Securities and Exchange Commission that has deterred banks from acting as digital asset custodians.
While big banks are striving to realize their blockchain ambitions, their focus remains primarily on enhancing internal efficiency. At present, their impact on the broader crypto industry appears limited, prompting questions about the transformative potential of blockchain technology, particularly in the hands of Wall Street.
