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Incredibly insightful

Insightful 👍

Do you think, some of these apps /  platforms will be adopting to GenAI as a wrapper communication or an advisory layer ? 

Liked your article, though I am not totally convinced about use of Generative AI on financial markets use cases where exact data needs to be extracted and the same extracted data needs to be used in downstream processes. Have explained in the below article as why.. 

https://www.finextra.com/blogposting/24436/large-language-models-are-not-a-solution-for-precise-data-extraction-in-banking

very insightful and well articulated

You must share your thoughts more often Piers. Everything you have written is correct, and so will this space emerge in not so distant future.

While CBDs are on the horizon and will be a reality sooner than we can contemplate, the critics in this space must realize that emergence of CBDs, and they being on a blockchain, doesnt necessarily mean the death of regulators or central banks.

CBDs and Central banks will coexist for a long tim.. And all of responsibilities related to macro economic rebalancing, issuance of CBDs, regulating rates and thereby attempting to control inflation will still be the onus of central banks.

In other words, what it means is that while emergence of CBDs doesnt mean the death of centralized governance by central banks, however CBDs will still come soon enough to bring in efficiencies in settlement cycles, cost of circulation, and interbank reconciliations.

Completely agree.. Central data strategy, compliance and governance must anchor and bring standardization in using  ML models in banks. 

Good writeup.

Two more elements that can add value to your thought would be 

1) How will banks mange the (somewhat) conflicting need of going open (that's inevitable) on one side, and as well ensure that all regulations related to data privacy (like GDPR) are taken care. May seem easy, but will involve critical thinking and process re-engineering.

2) Standardization of APIs, which today is one of the biggest detterents to move towards API strategies at scale.

great read..... and fantastic articulation of thought

Dear Ketharaman,

Can you explain in detail as how with JP Coin do you see that there is an introduction of a new middleman? 

Consider before answering the  following :

1) Difference between permissioned and permissionless blockchain frameworks. And if you are still comparing Bitcoin with this then at some stage u will have to stop doing that. Gen2 of all blockchain frameworks are mostly permissioned and they are being modeled to solve more than one problem.  Which means that not all are looking at the middleman problem only. 

2) That not all DLTs are blockchains atall.  For example CoRDA. And in the financial services world you will see more of CoRDA kind of frameworks being adopted to solve, not always the trust issue, but also bigger problems like innefficiecies in settlements and reconciliations.

3) There are more than one use-case of this generic framework and banks (to begin with) are not Investing in this technology  to remove the need of a central guarantor but to solve other problems. 

See this has a constructive discussion and not an argument :). 

Happy to connect with you on LinkedIn if you want a more detailed conversation surrounding this. 

You may also want to study "Project Spunta" to clear some of the perceptions surrounding this. 

Regards

Prasoon 

Hi Philip,

Using this framework, when a client of JP would send money to another client of JP (as it will be intrabank to start with), over this network, tokens (JPM Coins) will be instead transferred and instantaneously these tokens will be redeemed for the equivalent amount of U.S. dollars, thus reducing the typical settlement time. 

Therefore each token (JPM Coin) will always be equivalent to one U.S. dollar as i explained in the column above.

The key to understanding the framework is in its scalablity in being agnostic to any currency becausse its just a token on the Distributed Lledger which will ideally help in representing a clients stake on the blockchain based on his currency reserve with the bank.

Therefore to answer your question:

• JPM Coin (as a token) remains inside the ledger.
• Howevber the redemption is instantaneous.
• And there is no concept of participating institutions yet. Because it will be just "intrabank" to begin with. So i would rather put it as "participating JP Clients"