Strong alliance! JP Morgan discusses merger of blockchain unit Quorum to ConsenSys

According to people familiar with the matter, JPMorgan Chase is in talks to merge its blockchain unit, Quorum, with Brooklyn-based Ethereum startup ConsenSys.

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A person familiar with the matter said the deal is likely to be officially announced within the next six months, but financial terms are not yet clear.

People familiar with the matter said that there are currently about 25 people working on the Quorum team worldwide, and it is unclear whether they will join ConsenSys after the merger.

Blockchain emerged a decade ago with software that tracks cryptocurrency transactions. Since then, banks and other large companies have been investing millions of dollars to develop and test a range of business applications using this nascent technology. However, the results of these bank efforts have been mixed, and few projects have had a significant impact.

JPMorgan Chase built the Quorum blockchain internally using a private version of the Ethereum network.

JPMorgan Chase is using Quorum to run the Interbank Information Network (IIN) it has developed, which includes more than 300 banks. As the largest bank in the United States by assets, JPMorgan also said that it will use Quorum to issue a digital currency called JPMorgan Coin, which aims to make instant payments through the blockchain.

A person familiar with the matter said the merger with ConsenSys would not have an impact on other JPMorgan projects running on IIN and Quorum.

The person familiar with the matter said that JPMorgan has been considering splitting Quorum for about two years and evaluated various options, including establishing an open source foundation, creating a new startup or merging it with another company.

The merger with ConsenSys seems to be chosen as the best way forward, as both organizations have partnered with Ethereum and have participated in joint projects in the past.

ConsenSys is a well-known blockchain startup, led by Joe Lubin, one of the co-founders of Ethereum, which developed rapidly during the 2017 crypto bubble. The company announced last week that it has laid off about 14% of its workforce as it is undergoing a restructuring to separate its software development business from its venture business.

The merger with Quorum will follow its transition to expanding the software division.

Quorum is open source, which means that its code is free and can be modified and redistributed. A person familiar with the matter said that the combined plan is to maintain the independence of the Quorum brand and keep the technology open source.