Titled Systems and Methods for the Application of Distributed Ledgers for Network Payments as Financial Exchange Settlement and Reconciliation, the U.S. Patent and Trademark Office published JP Morgan Chase Bank’s formal application to patent what amounts to a variation on blockchain technology.
JP Morgan Chase is the biggest bank in the United States, and it ranks as the world’s second largest by market cap. Its head, Jamie Dimon, has gone after the phenomenon of cryptocurrencies quite publicly over the years. His rhetoric seemed to ramp up in direct relation to the then skyrocketing price of bitcoin (BTC). Back in 2017, these pages noted, “JP Morgan executive Jamie Dimon is downplaying bitcoin again and this time calling the decentralized currency a ‘fraud.’ Dimon told a CNBC broadcast that bitcoin markets would “blow up” and he would fire anyone from his team if they traded bitcoin. ‘It’s worse than tulip bulbs — It won’t end well,’ explains Dimon to the news outlet.”
Not too much long after, Mr. Dimon would not “shut up about bitcoin as the bank executive called bitcoin investors ‘stupid’ and someday they will ‘pay the price,’’ we explained. If that wasn’t enough, the bank was rumored to be considering bitcoin futures. This year’s turn, however, began when Mr. Dimon walked back some of those statements. Indeed, its annual report openly feared crypto would be a hugely disruptive force going forward, and perhaps for good. Such recent statements appeared to signal a shift in JP Morgan attitudes.
The best evidence came this week, as the Patent Office detailed, “Systems and methods for the application of distributed ledgers for network payments as financial exchange settlement and reconciliation are disclosed. In one embodiment, a method for processing network payments using a distributed ledger may include: (1) a payment originator initiating a payment instruction to a payment beneficiary; (2) a payment originator bank posting and committing the payment instruction to a distributed ledger on a peer-to-peer network; (3) the payment beneficiary bank posting and committing the payment instruction to the distributed ledger on a peer-to-peer network; and (4) the payment originator bank validating and processing the payment through a payment originator bank internal system and debiting an originator account,” are all what JP Morgan is after.
It might be the bank is attempting to cut in on the money wiring services industry across the globe. The market for remittances is many billions. Just how a blockchain, in the way commonly understood regarding the technology, would assist in cross-border transactions without a proprietary coin affiliated is not immediately clear as of this writing. What is clear is that JP Morgan and Mr. Dimon are sharing large slices of humble pie as news of the patent application spreads.