JPMorgan’s blockchain unit CEO says consumer protection needs to be a priority in digital asset projects
GP: JPMorgan office
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SINGAPORE — Banks have to prioritize consumer protection as they embark on digital asset experiments, said Umar Farooq, chief executive officer of JPMorgan’s blockchain unit Onyx.
Many blockchain projects and other crypto protocols have the potential to make financial services more efficient, accessible and affordable. But without proper precautions, they could also expose customers to cybersecurity risks.
In recent months, many crypto investors have been struck by hacks and scams. For example, crypto exchange Binance was hit by a $570 million hack in October and Deribit lost $28 million in a hot wallet hack this month.
“What a bank needs to do from a regulatory point of view and customer’s point of view is that we need to protect our customers. We cannot lose their money,” Farooq said during a panel at the Singapore Fintech Festival 2022 on Wedneday.
“I do think you need some sort of identity solution or know-your-customer solution which verifies who the human being that is interacting is and what they are allowed to do. Because without that, in the longer term, it just doesn’t work,” he added in an interview with CNBC.
Farooq explained that JPMorgan is using a solution called verifiable credentials that live in the customer’s blockchain wallet. When the customer goes to a protocol to trade, the protocol validates the credential.
“I can’t foresee people being able to send money across borders if no one checks and no one knows who’s sending money to who, because sooner or later they will be in a money laundering incident,” said Farooq.
“So those are the very fundamental things that need to be addressed before you even get to systematic issues. Education, protection and identity need to be in place,” he added.
Project Guardian industry pilot
Farooq and Onyx tackled some of these security and verification issues as part of Project Guardian, an industry pilot the Monetary Authority of Singapore announced in May.
“It was very, very hard,” Farooq said during the panel.
In the pilot, DBS Bank, JPMorgan and SBI Digital Asset Holdings conducted transactions in tokenized foreign exchange and government bonds. Tokenizing a financial asset involves converting its ownership rights into digital tokens. It allows financial transactions such as borrowing and lending to be performed autonomously on a blockchain without the need for intermediaries.
“It was the first time we had tokenized deposits. I actually think it’s the first time any bank in the world has tokenized wallets on a public blockchain,” Farooq told CNBC in an interview.
“Using public blockchain, we had to spend a lot of time thinking through identity. We did lots of audits of smart contracts because again — they were publicly visible. And finally, it was using a protocol to actually make it all happen. It’s a lot of managing the risks. All of these were firsts for us,” he said.
Technology
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John Giannandrea.
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Apple’s AI chief is stepping down, the company announced Monday in the most visible shake up yet to the iPhone maker’s artificial intelligence group since launching its Apple Intelligence suite in 2024.
John Giannandrea, who held the position since joining the company in 2018, will be replaced by Amar Subramanya, an AI researcher who most recently worked for Microsoft and was previously part of Google’s DeepMind AI unit, according to his LinkedIn profile.
Giannandrea was a senior vice president and reported to Apple CEO Tim Cook. He will continue to serve as an advisor until retiring next spring, Apple said.
The change comes as experts this year have said Apple has fallen behind its tech peers in artificial intelligence, a tech field that has been reinvigorated since OpenAI launched ChatGPT in 2022.
Apple Intelligence, which was intended to put Apple alongside AI leaders like OpenAI and Google, has not been well-reviewed by users and critics. Earlier this year, one of its most critical aspects, a significantly improved Siri assistant, was delayed until 2026, signaling development challenges.
Subramanya will serve as Apple’s vice president of AI, and will report to software chief Craig Federighi, the company said.
In a statement, Cook said Federighi has already been playing a key role in Apple’s AI efforts.
“In addition to growing his leadership team and AI responsibilities with Amar’s joining, Craig has been instrumental in driving our AI efforts, including overseeing our work to bring a more personalized Siri to users next year,” Cook said in a statement.
Subramanya will lead teams working on Apple’s foundation models, research and AI safety. Other teams previously under Giannandrea will move under COO Sabih Khan and services chief Eddy Cue, Apple said.
Although Apple shares are up 16% in 2025, they have lagged many other big tech companies as investors say the iPhone maker has fallen behind its peers that are investing billions into AI data centers, chips and frontier models.
Apple said in August that it was “significantly increasing” the amount it spends on AI, and Cook has said it’s a “profound” technology. Apple has struck a deal with leader OpenAI to integrate ChatGPT into some of its products, like Siri.
But Apple is playing a different game than companies like Microsoft, Google, and Meta. It’s spending much less on infrastructure for the technology. Apple also prefers its AI to run on its devices, instead of communicating back to more powerful computers in the cloud.
Apple this year also saw Jony Ive, its legendary hardware designer who helped late co-founder Steve Jobs invent the iPhone, sell his startup io for $6.4 billion to OpenAI, with the intention of helping the AI lab release its own hardware.
Analysts say that Apple has built a loyalty moat among its customers since the iPhone launched in 2007, but AI-driven hardware is on its way, with Ive and OpenAI CEO Sam Altman last month saying that they’ve already completed their first prototypes and could reveal them in two years or less.
WATCH: Apple will gain more AI functionality over time, says D.A. Davidson’s Gil Luria
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