- Anonymous sources have revealed a possible investment by banking giant JPMorgan of $20 million in Ethereum’s ConsenSys (ETH).
- JPMorgan’s investment will lead to a merger between ConsenSys and its blockchain development unit, Quorum.
According to anonymous sources at Block, financial giant JPMorgan is in advanced talks to make a $20 million investment in ConsenSys. The Ethereum development studio could receive this investment as part of a $50 million investment round, according to sources.
In addition, ConsenSys could merge with JPMorgan’s blockchain development unit Quorum. The Ethereum development studio would be responsible for the support and maintenance of Quorum. JPMorgan already started negotiations with ConsenSys in February of this year.
Among the products developed by JPMorgan’s blockchain unit is the JPM Coin. Designed to be a stablecoin similar to Tether and housed on the Quorum blockchain, the JPM Coin is a business-to-business (B2B) money transfer medium.
The Quorum blockchain also constitutes the financial giant’s Interbank Information Network (IIN). The network has now expanded to 320 banks that use it to exchange payment data on a global scale, supported by the Quorum blockchain. Therefore, JPMorgan would benefit greatly from joining ConsenSys.
Reasons behind the investment in Ethereum’s ConsenSys
ConsenSys was founded by Ethereum co-founder Joe Lubin in 2017 during the most important bull market the crypto market has ever experienced. Recently, the start-up has suffered considerable financial setbacks. At the beginning of the year, ConsenSys laid off 14% of its employees and began planning an internal restructuring.
The deal with JPMorgan could be part of ConsenSys’ new strategy. Should the rumors about the investment be confirmed, the company would alleviate some of its financial problems. As a result, the development of Quorum would accelerate and it could keep pace with the changes expected for Ethereum when Ethereum 2.0 enters phase 0.
The Ethereum development unit has worked on Quorum-based products in the past. One of the most important is the Aura LVMH blockchain, designed to counteract counterfeit luxury goods. ConsenSys also developed a Quorum-based commodity trading network, called Komgo.
JPMorgan’s investment in ConsenSys would be another indicator of the growing interest the traditional market has in blockchain technology and cryptocurrencies. As reported by CNF, even banking institutions that rejected the crypto industry seem to be looking to develop or are already developing some related product.
Goldman Sachs is one such institution. The banking giant may issue its own stablecoin in the future. Goldman Sachs’ issuance of a stablecoin would be aimed at not falling behind in innovations where JPMorgan already has an advantage with its JPM Coin.