J.P. Morgan Chase is expanding its blockchain platform by including new settlement features and aims to minimize inaccuracies in the cross-border payments process.
New features will be added to the Interbank Information Network (IIN) blockchain network, which is now actively used by more than 220 banks worldwide. Initially, the platform was designed to resolve compliance issues and accelerate the exchange of payment information between financial institutions.
JP Morgan is planning to improve its blockchain network at the point of settlement. With the help of newly added improvements, it will be possible to instantly verify whether a transaction is being sent to the correct bank address. Currently, errors when filling in the details or other system failures can be detected only after a few days. Such delays negatively affect the businesses of large financial institutions and their clients, but the JP Morgan’s blockchain powered by Quorum, an enterprise-focused version of Ethereum, aims to solve this problem once and for all.
In an interview with Financial Times, the head of global clearing department, John Hunter, noted that the problem with inaccurate payments in the cross-border transactions is huge – errors account for 5% to 20% of all transactions. With all this in mind, banks are stuck in the mid-80s – 90s, said Hunter. The current technological solutions are not suited to solve this operational problem.
It is expected that the new features of JPMorgan’s blockhain will be rolled out later this fall. According to FT, the bank expects new system to be more useful for international payments, where errors in an account number, sort code or address are the most common.
JPMorgan is also actively trying to attract new fintech companies to its platform. The bank via IIN network is offering a special sanbox infrastructure for creating blockahin applications. According to Hunter, this can greatly simplify the life of startups, since they “only need to bring their intellect”, and the platform will do the rest.
“This removes many challenges and hurdles — tooling, ecosystem, data, environment, etc,” Financial Times quoted John Hunter as saying.
As reported earlier this year, JP Morgan announced the launch of JPM Coin, which many see as direct competitor to Ripple’s XRP. Given that the CEO of JPMorgan Chase, Jamie Dimon, is one of the most prominent opponents of Bitcoin, the announcement was a surprise to many in the cryptocurrency community.
As for the IIN update, this is a good example of how the blockchain can simplify the world’s largest businesses, here and now. This is no longer hypothetical discussions about what technology is capable of, it is the real use-case of blockchain, which will save a lot of time, money and resources.