NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N) is considering a spin-off of its marquee blockchain project Quorum believing independence from the bank could increase the platform’s appeal, sources familiar with the matter said on Thursday.
Blockchain first emerged as the software underpinning cryptocurrencies but is being adapted to build a variety of business applications. Quorum is already open source, meaning its code is free and may be modified and redistributed.
Discussions were still in the early days, one of the sources said.
The plans were first reported by the Financial Times.
“We continue to believe distributed ledger technology will play a transformative role in business which is why we are actively building multiple blockchain solutions,” the bank said in a statement.
“We’re not going to comment on speculation, but Quorum has become an extremely successful enterprise platform even beyond financial services and we’re excited about its potential.”
Quorum is among a swathe of initiatives by large banks on blockchain.
Banks have been spending millions of dollars on the technology in the hopes that it can help them slash costs and simplify some of their processes, ranging from international payments to the settlement of securities trades.
Yet the technology is still in its early days and projects have faced some growing pains.
JPMorgan was among the banks that left blockchain consortium R3 last year, while a partnership between Belgium-based settlement provider Euroclear and U.S. startup Paxos to develop a blockchain-based service for the London gold market was dissolved in July.
It remains unclear what the spin-off plans would mean for the JPMorgan employees that have been working on Quorum and whether they would join the new entity, one of the sources said.
Product development for Quorum has been led by Amber Baldet, an executive director of the bank’s Blockchain Center of Excellence. Baldet could decide leave the firm and start a new venture, join the spun-off entity or stay at the bank, the source said. Baldet did not immediately respond to a request for comment.
The bank had built Quorum internally using the Ethereum network, one of the most popular public blockchains. The initiative was seen as a noteworthy endorsement to Ethereum, the blockchain behind cryptocurrency ether.
JPMorgan announced in October that it would be using Quorum to build an interbank payments platform alongside Australia and New Zealand Banking Group Ltd (ANZ.AX) and the Royal Bank of Canada (RY.TO).
Reporting by Anna Irrera; Editing by Lisa Shumaker