Wall Street Bankers Use Blockchain Beyond Crypto

While blockchain is seen as the shared ledger technology behind facilitating and tracking cryptocurrency transactions, Wall Street bankers are beginning to explore its use in commerce and beyond, even as they take away direct crypto investments.

The country’s largest bank, JP Morgan, has already started processing some trades on blockchain networks. Goldman Sachs is actively exploring it, as are other major banks, The Wall Street Journal reported reported Monday (August 22).

Because the system that Wall Street currently operates on is outdated and slow, bankers are seeing blockchain as a cheaper, faster alternative with the potential to increase profits, according to the report.

See also: 7 of the 10 largest blockchain enterprise investors are targeting payments

The blockchains, which is also known as distributed ledger technology, uses a central ledger to keep track of assets, transactions and ownership. Blockchains used on Wall Street will be permissioned networks with a central party controlling who is allowed.

“Blockchain technology is going to rewire all financial services,” Tom Farley, the former president of the New York Stock Exchange, told the Journal.

Read more: PYMNTS Intelligence: Evaluating the ROI of Blockchain Technology

Wall Street firms have been experimenting with blockchain projects for about five years, but the report noted that so far the impact on financial transactions has been minimal. Goldman and others have said that handling trades across blockchains is likely to reduce some risks and make it easier to find shareholders.

The report noted that Mathew McDermott, who runs the digital asset group at Goldman, was initially skeptical of blockchain technology. However, he told the Journal that his attitude has changed, saying: “I’m not doing this just to satisfy my curiosity. Everything has a commercial driver.”

Outside of banking, other companies are also exploring the technology. For example, Walmart uses blockchain to track its supply chains, and the Journal noted that in real estate, title companies have begun to explore blockchain’s use in recording home ownership.