By CCN.com: Wall Street firm JPMorgan has a plan to save the banking industry’s lucrative cross-border payments business from alternatives such as Bitcoin and fintechs such as Ripple and TransferWise – expand the use cases for its permissioned blockchain network, the Interbank Information Network (IIN) to include settling payments.
According to the Financial Times, plans are underway to add a payments settlement feature to the IIN. The feature will allow payments being made to be verified in real time as they are being routed to a valid account.
This will eliminate delays or cancellation of transactions which is usually caused by errors such as the wrong account number or sort code being entered. The system is expected to go live by July.
Currently, IIN’s use cases are limited to enabling information sharing among banks on a mutually accessible ledger. Financial institutions are thus able to resolve compliance issues which are also a leading cause of payment delays.
So far over 200 banks from around the world have joined the IIN blockchain network. The IIN is powered by a permissioned variant of the Ethereum blockchain known as Quorum.
Additionally, JPMorgan is also keen enhancing the development of applications for the IIN. Consequently, JPMorgan will set up a sandboxed development environment offering fintech firms various tools and building blocks. These tools and building blocks include data modelling, document file transfer and secure messaging.
Coming hot on the heels of announcing a stablecoin known as JPM Coin, the introduction of a payments settlement feature for the IIN is an indication that the banking giant sees the biggest threat from cryptocurrencies being taking away the lucrative fees and commissions it earns from its money transfer business.
Currently, JPMorgan’s wholesale payments business records over $6 trillion in daily transactions, according to CNBC. The JPM coin will primarily target multinational corporations and other verified wholesale clients of JPMorgan.
Despite JPMorgan’s boss Jamie Dimon being a sworn bitcoin skeptic, the banking giant has consistently invested in blockchain technology. Just late last month, jobs website Indeed.com revealed that on Wall Street JPMorgan was the leading recruiter of blockchain specialists.
Additionally, JPMorgan has this year’s biggest technology budget, most of which is spent on new technologies that include blockchain. According to a survey conducted by investment banking giant UBS, JPMorgan had a technology budget of $11.4 billion in 2019.
Bank of America ($10 billon), which has been filing blockchain patents at a frantic pace had a technology budget of $10 billion. Wells Fargo and Citigroup had technology budgets of $9 billion and $8 billion respectively, per the same study.
Last modified: March 4, 2021 2:44 PM