Friday, February 21, 2020

JPMorgan’s Blockchain Payment System To Stage With Transferwise and Ripple

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Babatunde Modupe
I am a freelance writer, Poet, blogger and cryptoenthusiast that is totally interested in blockchain technology and sharing it's Information with others.

JPMorgan plans to introduce blockchain payment settlement to combat the dominance of Bitcoin, Ripple, Transferwise among others in real time settlement. The cross-border payment is a lucrative business for the banking industry which is gradually being taken over by emerging technologies and blockchain.

JPMorgan’s Blockchain Real Time Settlement

Wall Street firm, JPMorgan plans to expand the use case of its permissioned blockchain network, the Interbank Information Network (IIN) to include settling payments. This feature will enable payments being made to be verified in real time as they are being routed to a valid account.

Also, the blockchain solution will help to 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.

Meanwhile, at the moment the use cases of IIN are limited to enabling information sharing among banks on a mutually accessible ledger. This enables financial institutions to resolve compliance issues which are also a leading cause of payment delay. Thus far, over 200 banks around the world have joined IIN blockchain network and are powered by a permissioned variant of the Ethereum blockchain known as Quorum.

Further, JPMorgan is making great effort to develop applications for IIN and plans is also underway to set up a sandboxed development environment offering fintech firms various tools and building blocks. These developments include data modeling, document file transfer and secure messaging.

At the moment, JPMorgan’s wholesale payments business records over $6 trillion in daily transactions, according to CNBC. Also, the JPM coin will primarily target multinational corporations and other verified wholesale clients of JPMorgan.

Ripple and Public Blockchain’s Threat To Real-Time Settlement

The adoption of ripple and other public blockchain settlement are threatening the lucrative market of the real-time settlement of the banking system. In recent time, Ripple has been adopted by many financial institutions in the world for real-time settlement, and the use of Bitcoin and other cryptos is increasing gradually.

Just like Christine Lagarde, IMF chief asserted, Blockchain tech and Cryptocurrencies are shaking the banking system. The innovation of JPMorgan aims at reaffirming the dominance of the banking sector even as the subject of crypto replacing the banking sector ranges on.

Meanwhile, JPMorgan has been an ardent fan and investor in the blockchain technology, though it resents Bitcoin and related digital currency. The firm is hiring more for blockchain jobs than other wall street firm. Also, according to a survey conducted by investment banking giant UBS, JPMorgan has a technology budget of $11.4 billion for 2019, the biggest and most of it will be spent on the blockchain technology.

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