JPMorgan executive deems public blockchain ledgers unsuitable for their intended purpose

Public blockchains still do not have the capacity to handle large volumes of transactions, as stated by a former JPMorgan executive. Umar Farooq, the CEO of JPMorgan’s blockchain-based payment platform Onyx, made these remarks during the BIS Innovation Summit on May 7. Farooq’s comments were in response to the Unified Ledger concept introduced by the Bank of International Settlements (BIS) last year, which aims to support central bank money flows and digital assets on its network. He explained that public blockchain validators cannot be held accountable if a $100 million transaction were to fail. Despite this criticism, JPMorgan’s Onyx platform is built on a private, permissioned version of Ethereum, allowing institutions to reverse transactions. Farooq also argued that cryptocurrencies issued on public blockchains create false incentives to attract more users and drive up the coin’s price. He believes that blockchains, like the internet, should be considered a public good. In contrast, traditional financial institutions are showing a preference for tokenizing assets on public blockchains. Celisa Morin, a former vice president at Grayscale, stated that BlackRock’s recent initiative could encourage more institutions in traditional finance to tokenize assets on public blockchains. BlackRock’s $100 million tokenized “BUIDL” fund, launched on the Ethereum network in March, currently holds over $382 million and is the world’s largest tokenization fund.