June 9, 2023

JPMorgan: Libra has significant growth potential

American financial holding JPMorgan has analyzed the pace of mass adoption of the blockchain, the stability of stablecoins and the prospects of the Libra project from the largest social network Facebook.

JPM_J_P__Morgan_Perspect_2020-02-21_3274027 by ForkLog on Scribd

JPMorgan experts note that technologyDistributed Registry (DLT) is increasingly being used by various companies, including banks and stock exchanges. However, in their opinion, the mass adoption of the blockchain is still a long way off.

“We see in DLT a long-term potential that can transform the business models of banks, increase the efficiency of information transfer, the reliability of its storage and fault tolerance of processes”- the researchers write.

According to them, the pace of progress will depend on the solution of legal and technical problems, as well as issues related to “cross-platform integration”:

“Over the past 3-5 years we have been observingwidespread adoption of blockchain solutions. However, the macroeconomic environment, regulatory frameworks, and technical issues such as cross-platform integration may affect future progress. ”

According to a 74-page report, banks useDLT for the creation of settlement and clearing systems, as well as collateral management mechanisms. Cryptocurrencies, in turn, are becoming more popular among major players.

“The cryptocurrency market continues to grow. The participation of institutional investors in digital asset trading has now become significant. ”- say the researchers.

About the prospects of Libra

The authors of the report are generally confident in the viability of the Libra payment system. However, some doubts are caused by the ability to scale the network in the face of a possible shortage of short-term liquidity.

“Stablecoins like Libra have significant growth potential. Ultimately, they can take on a significant portion of the transactional activity.- emphasize the researchers. - However, a possible collapse of the system, especially during a period of increased load, can cause serious macroeconomic consequences ”

In the context of stablecoins in general, the authors noted the following:

“The world is absolutely ready for private money. Most of what we consider to be fiat currency has already been privately issued. ”

JPMorgan, on the other hand, is confident that stablecoins will face serious regulatory barriers before they are "accepted by the central government as a means of payment."

Recall, according to some reports, JPMorgan Chase is negotiating the merger of its own blockchain unit Quorum with the Ethereum startup ConsenSys.