JPMorgan Wants to Use Blockchain to Issue ICO Tokens

American investment banking giant JPMorgan Chase is pursuing a patent for a distributed system that uses blockchain technology to issue virtual depository receipts that sound suspiciously like initial coin offering (ICO) tokens.

JPMorgan Wants to Host IPOs on a Blockchain

The patent application, filed by JPMorgan in January and published by the U.S. Patent & Trademark Office (USPTO) on Thursday, outlines a method whereby users on a distributed network such as a blockchain can tokenize assets and trade these virtual depository receipts.

To create a security token, an originator such as an asset owner or broker will encumber the asset by entrusting it to a qualified custodian, who will then authorize a virtual receipt for the deposited assets.

This virtual depository receipt would essentially be a security token, regulated under the authority of the U.S. Securities and Exchange Commission (SEC) or other local securities regulators. This designation would necessarily restrict how and where the tokens could be traded.

Depending on the nature of the asset, a token holder would also be able to redeem the receipt for the underlying asset by transferring it to the custodian, who would then cancel the tokens.

Notably, JPMorgan believes that one use case for this proposed system is to allow companies to hold initial public offerings (IPO) in a blockchain environment, more or less fulfilling the ultimate promise of the initial coin offering, though it is doubtful both that the firm would ever acknowledge that fact or refer to such token distribution events as ICOs.

Obligation-Backed Receipts

The patent also notes that the tokens could represent obligation-backed virtual receipts, more commonly known as debt equity.

This is not the first time that JPMorgan has mulled creating a platform to issue debt on a blockchain. Earlier this year, the firm partnered with the National Bank of Canada and a group of other firms to simulate the issuance of a $150 million Yankee certificate of deposit (CD) on Quorum — JPMorgan’s Ethereum-based enterprise blockchain platform — in parallel with an actual CD issued through conventional means.

“One of the mandates of the J.P. Morgan blockchain program is to identify how blockchain technology can create value, efficiency, and a better experience for our clients across the financial markets value chain,” said Christine Moy, JPMorgan’s blockchain program lead, at the time. “ We look forward to exploring blockchain-enabled capital markets applications, how these types of transformative opportunities can benefit our clients and counterparts.”

As CCN reported, while JPMorgan has been generally hostile toward cryptocurrencies — CEO Jamie Dimon, many will remember, once routinely referred to bitcoin as a fraud — the firm has for years been a leader in the development of enterprise blockchain applications, which seek to capitalize the benefits of distributed ledger technology (DLT) in a private, permissioned environment, most notably through its development and promotion of Quorum.

Images from Shutterstock

Follow us on Telegram or subscribe to our newsletter here.
Join CCN’s crypto community for $9.99 per month, click here.
Want exclusive analysis and crypto insights from Click here.
Open Positions at CCN: Full Time and Part Time Journalists Wanted.


Author: Josiah Wilmoth

Source link

Related posts

5 Thoughts to “JPMorgan Wants to Use Blockchain to Issue ICO Tokens”

  1. I think this website holds very fantastic pent content material blog posts.

  2. Manuel Pellegrini will raid the Spanish market to add more foreign flavour to his Manchester City squad this summer. The Spanish Acquisition! Pellegrini could raid La Liga to bring City success, with nearly £90m worth of class on his hit-list

  3. On September 14 1963 a 17-year-old George Best stepped onto the Old Trafford pitch to make his debut against West Bromwich Albion – it is exactly fifty years since the Northern Irishman introduced himself for the first time an adoring Manchester United crowd. Old Trafford had its first glimpse of George Best 50 years ago today – Sportsmail pays tribute to the magical boy from Belfast

  4. Aaron Ramsey was replaced by Santi Cazorla a little after the hour mark during Arsenal’s 4-3 loss to Liverpool, with the Gunners now fearing he could miss three weeks with a hamstring problem. Arsenal’s Aaron Ramsey faces three weeks out after suffering a hamstring injury in the 4-3 loss to Liverpool

  5. Vincent Tan has torn into Wigan Athletic, accusing ‘a racist chairman of hiring a racist manager’ as the storm involving Dave Whelan and Malky Mackay escalated. Malky Mackay is a ‘racist manager’ who was hired by a ‘racist chairman’! Cardiff owner Vincent Tan hits out at his former coach and Wigan’s Dave Whelan 

Leave a Comment