JPMorgan Chase, the United States’ largest bank, is reportedly considering merging its in-house blockchain unit Quorum with major Ethereum-focused firm ConsenSys.
The blockchain world may soon be seeing a major merger with the traditional financial sector.
According to a Reuters report on Feb. 11, unnamed persons familiar with the matter claim that the merger is likely to be officially announced within the next six months. The financial terms of the deal reportedly remain to be worked out.
Ethereum ties are a plus
Quorum is JPMorgan’s private blockchain platform built on the Ethereum protocol, and reportedly has roughly 25 employees deployed worldwide currently working on its development.
Quorum underlies JPMorgan’s Interbank Information Network (IIN), which has been expanded to comprise a network of 320 banks sharing global payments data over the blockchain.
It is also planned as the basis for JPMorgan’s forthcoming settlement-focused digital currency, JPM Coin, first announced in mid-February of last year.
A prospective merger with Consensys would impact neither the course of the IIN or the JPM Coin, a source reportedly told Reuters.
For the past two years, the bank has reportedly mulled various options for Quorum, including establishing a dedicated open-source foundation, creating a new startup or pursuing a merger.
Consensys has purportedly been chosen as the most viable route given its close work with the Ethereum protocol.
Recent developments at Consensys and JPMorgan
Consensys last week revealed it was moving to cut its employee base down by roughly 14% as part of a restructuring that will separate the firm’s software development work from venture activities.
While JPM Coin is yet to be released, JPMorgan has recently been building out a public-private hybrid blockchain network called Kadena, which includes smart contract functionality.
Global Blockchain Tech Market to Surpass $16B by 2024
The global blockchain technology market is estimated to surpass $16 billion by 2024, according to a recent report from market research firm Global Market Insights, Inc.
In a Sept. 20 press release, Global Market Insights provided highlights from its 180-page-long report entitled “Blockchain Technology Market By Providers (Infrastructure Provider, Application Provider, Operators), Application (Smart Contract, Payment & Wallet, Digital Identity, Exchange, Compliance & Risk Management), End-Use (BFSI, Government, Healthcare, IT Service, Media & Entertainment, Transportation & Logistics), Regional Outlook, Competitive Market Share & Forecast 2024.”
Per the analysis, the key factor contributing to the global blockchain tech market growth will primarily be increasing adoption of blockchain by financial companies. Financial organizations will purportedly take up blockchain due to its ability to boost the efficiency of companies’ internal processes and cut the cost of operation in sectors such as trade finance, documentation and Know Your Customer.
Stakeholder segmentation of the blockchain market
A stakeholder segmentation of the blockchain market shows that application providers will see an 85% compound annual growth rate (CAGR) between 2018 and 2024, while digital identity application will purportedly register an over 90% CAGR throughout the same period. The latter will find its driver in the attempt to resist cyberattacks.
The report further states that the government segment of the blockchain market is expected to grow by 85% CAGR over the forecast period, and the market’s share from healthcare applications will register an 85% CAGR up to 2024 as well.
Earlier in September, Global Market Insights released a report that dove deeper into the blockchain tech in healthcare market, projecting that it will exceed $1.6 billion by 2025. Examination of medical outcomes, interoperability of health data and cost component reductions will further impact blockchain adoption, according to the assessment.
Tech market advisory firm ABI Research published its findings regarding global revenues from blockchain technology, in late August, the firm suggested that global revenues for blockchain tech are expected to hit $10 billion by 2023.