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JPMorgan creates new unit for blockchain projects as it says the technology is close to making money

A man is reflected in a sign outside of the JPMorgan Chase headquarters in New York City.

Getty Images

After years of hype with little to show for it, blockchain technology is on the cusp of a breakthrough: making money in actual business applications.

At JPMorgan Chase, the firm's digital currency JPM Coin is being used commercially for the first time this week by a large technology client to send payments around the world, said Takis Georgakopoulos, the bank's global head of wholesale payments.

That development, along with other behind-the-scene moves, persuaded JPMorgan to create a new business to house its blockchain and digital currency efforts called Onyx, Georgakopoulos said last week in a phone interview. The unit has more than 100 dedicated staffers, he said.

"We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business," Georgakopoulos said.

Initially hyped as a technology that would upend entire industries from finance to manufacturing and agriculture, blockchain has attracted billions of dollars of investment, but little in the way of tangible results yet. Venture capital funding for blockchain start-ups dropped 35% to $2.79 billion last year, according to CB Insights.

JPMorgan's move could provide a boost to the broader blockchain and cryptocurrency industries, whose proponents believe that mainstream adoption is nearing. Digital currencies popped last week after PayPal announced that users could soon buy, hold and sell crypto directly from their accounts.

Takis Georgakopoulos.

Source: JP Morgan

JPMorgan is focused on relieving pain points in the world of wholesale payments, specifically areas where the industry could save hundreds of millions of dollars with a better solution, said Georgakopoulos.

In cross-border payments, for in...

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