Author: Claire Wu
There has been a lot of news about JPMorgan Chase lately. Let's connect the stories together and see what big game JPMorgan Chase is playing?
On February 20, 2020, according to Sina Finance News, JPMorgan Chase and Goldman Sachs Group supported the establishment of a new stock trading market that will compete with the New York Stock Exchange and Nasdaq. The two Wall Street banks and trading firms, Jane Street Capital LLC, are the latest to join the ranks, according to the statement, joining nine financial industry giants including Citadel Securities, Virtu Financial Inc. , Bank of America and Morgan Stanley, among others, are backing the new stock exchange, Members Exchange (MEMX), which is scheduled to launch on July 24 following approval by the SEC. They want to break up monopolies, drive down transaction costs, and increase the transparency of market data.
In the current world securities market, the New York Stock Exchange and Nasdaq have become an oligopoly. What gives these financial giants the confidence to break this monopoly?
image description
Image credit: Blocktempo
JPMorgan Chase is now using the Quorum blockchain built on a private version of the Ethereum network to run the Interbank Information Network (IIN) and issue JPMorgan coins for instant payments. More than 300 banks have participated in this network . The merger with ConsenSys will have no impact on other JPMorgan projects running on IIN and Quorum, the people said.
In fact, many multinational financial institutions and large companies have been investing millions of dollars in the past few years to use blockchain technology to develop a series of applications to optimize existing businesses, but few projects are like Bitcoin and Ethereum. Significant impact. Libra is currently the most explosive and influential project led by multinational companies, but it is struggling on the road to compliance.
At the Hong Kong Blockchain.new sharing session, the person in charge of ConsenSys told us that ConsenSys is developing a project related to ERC 1400, which can help traditional enterprises to cryptocurrencies their equity. ConsenSys attaches great importance to the development potential of the Hong Kong market.
Yesterday, we saw another piece of news: [encrypted derivatives exchange FTX launches equity token sale]. Crypto derivatives exchange FTX has launched equity tokens that investors can buy via bitcoin and other payment methods. According to an official announcement issued by the exchange, the equity token represents partial ownership of FT Trading Ltd. Each stock token is priced at $2, with a minimum purchase of $250,000. FTX CEO Sam Bankman-Fried said the equity token helps small investors acquire a stake in the company, as the minimum purchase amount through the standard route is $2.5 million.
As early as November 2018, Dider had stated in the expert forum of [Magic Piper Technology Development Community] that cryptocurrency is of great significance to financial innovation. Because stocks have no fungibility (fungibility), but cryptocurrencies have global fungibility (global fungibility). This is a huge innovation in the underlying technology, and it is also the biggest advantage of cryptocurrencies. It can also be traded 24 hours a day. There are very few countries that can rely on pure administrative supervision to cut off this fungiblity. The difference between traditional stocks and cryptocurrencies is: stocks, if you don’t make special arrangements to promote them, there is no way to connect globally; cryptocurrencies, if you don’t make special arrangements to prevent them, they will naturally be able to connect globally. Guan vaguely put it well, thanks to the cross-regional and cross-time consensus mechanism of the blockchain.
Pied Piper Group Friends YCX said that the biggest feature of the current securities system structure is that there is a centralized third-party credit or information intermediary agency as a guarantee to help people realize value exchange. As a new model of information technology, blockchain technology has the characteristics of consensus mechanism, non-tampering, and programmability, and can realize the transformation from centralized trust to weak centralization, which brings new possibilities to the securities industry. Private equity management and securities issuance transactions can be redesigned and optimized through blockchain technology.
The blockchain can use distributed ledgers to record equity information as an electronic certificate for equity registration, and realize paperless securities registration without relying on third-party public trust institutions. At the same time, it is of great significance to make full use of the security, transparency, tamper-resistant, and easy-to-track features of the blockchain ledger to record the company's equity and its change history, so as to make the equity registration certificate more efficient and credible. The blockchain’s management of securities registration essentially weakens the function of the third-party subject that provides credibility. Securities registration and transactions do not need to go through a specific third-party subject, but rely on all participants to jointly maintain a registration system, which is similar to Libra. Similarly, it embodies the self-governing spirit of the alliance and enhances its credibility. 【1】
Seeing this, we will not have any doubts about JPMorgan Chase joining the MEMX alliance. In the blockchain distributed bookkeeping mode, each market participant has a complete market ledger, and the consensus mechanism ensures that the securities registration is updated synchronously in the entire market, ensuring the authenticity and consistency of the content. In the case of regulatory agencies, transaction settlement is realized. Through the establishment of smart contracts on the blockchain, securities can be turned into digital smart assets. Smart contracts will stipulate the rights and obligations of participants, and realize the automation of execution in the form of calculation programs, reducing the cost of manual operations again. From the point of view of the realized functions, on the one hand, the blockchain transfers the right to record to the company itself, which embodies the spirit of autonomy; on the other hand, it can also ensure the openness, transparency and authenticity of information records, minimizing rights disputes change.
Of course, the Nasdaq exchange is also keeping pace with the times. The Linq blockchain platform established in cooperation with the blockchain company Chain provides private equity management services for non-listed companies. Smart contracts turn securities into smart assets. Stock dividend distribution, shareholder voting, lock-up restrictions, etc. can be programmed and automated to reduce manual operations as much as possible. 【1】
Reference article:
(full text)
Reference article:
【1】Magic Piper Theme Sharing | Yu Chengxuan: Digital programmable securities are reshaping the financial world
