wired.com / CADE METZ.09.11.15 8:00 AM
JP MORGAN CHASE CEO Jamie Dimon described the situation in the simplest terms. “Silicon Valley is coming,” he said.
In his annual letter to shareholders this past spring, Dimon warned the Wall Street old guard that their way of doing things was under siege from “hundreds of startups with a lot of brains and money.” Traditional banking was facing a world of more “seamless and competitive” alternatives. JP Morgan, he said, would work to modernize its own services and, if need be, partner with those same Silicon Valley startups striving to undermine the way the banking industry has long done business.
His warning, it turns out, did not go unheeded. Over the past several months, Wall Street has embraced the new wave of Silicon Valley fintech with remarkable speed. The latest example: earlier this week, a small San Francisco outfit called Chain said it had received $30 million in funding from such names as Nasdaq, Citi Ventures, Capital One Financial, and Visa.
Chain helps build financial systems based on the blockchain, the online public ledger that underpins the bitcoin digital currency, a technology that could bring more efficiency and security not only to the way we exchange money, but to the way we trade other financial assets, including stocks, bonds, and futures. Nasdaq, the company behind the Nasdaq stock exchange, is already partnering with Chain to build a digital marketplace for shares in private companies, and Chain CEO Adam Ludwin says that other investors are using the company’s tech to create their own systems atop the blockchain idea.