The objective of the financial company is to speed up the payment transactions and to address the main challenges of data sharing between banks.
Multinational investment bank JP Morgan will launch its blockchain-based payment system in Japan early next year. The intention is to accelerate payment transactions and also address major challenges like sharing data between banks.
It will be based on JP Morgan’s in-house blockchain platform Quorum. Currently, more than 80 Japanese banks expressed their interest in being part and join to the new platform. Almost 20% of the total of 365 global participants is from Japan.
This network dubbed the Interbank Information Network (INN) will be used to avoid money laundering so it will be known as an anti-money laundering (AML) tool in a continent where crime cases increased last year.
“The benefits of participating are significant. Accumulating experience with INN will lead to further efficiency, including standardization of procedures”, Dr. Yukio Uchino, from the Daiwa Institute of Research said.
He added that whilst the potential benefits are vast, the main challenge will be “how to get major Chinese banks to join”.
Additionally, Daizaburo Sanai, Executive Director at JP Morgan, stated that the INN is operating in 70 banks in Europe, Asia and also in the United States.
Sanai explained that the reason why Japanese firms want to join the platform is to improve anti-money laundering since the tool, reportedly, makes the tracking of cash recipients “faster and more efficient”.
JP Morgan is Studying How to Employ Blockchain Technology
The project is possible due to JP Morgan’s interest in using new technologies. In this way, the second-largest investment bank of the world has been looking for new ways of using blockchain technology and crypto-related initiatives.
Besides, the company has its cryptocurrency. The name of the digital asset is JPM coin and will be launched very soon, as it was reported in June.
Another project of JP Morgan that was recently announced, was created to speed up cash and collateral transfers, according to the company.
JP Morgan issued an official statement. It explained that it partnered with California-based fintech firm called Baton Systems to settle and manage payments, according to what explained the official announcement in mid-November.
The company expects that the receptivity of the payment network is favorable since Japanese society is very interested in this kind of technology.
China is also doing efforts and implementing some changes to adopt blockchain technology. The Asian country did not accept cryptocurrencies. But now, President Xi Jinping assured it is very important to use and develop blockchain technology.
“We must take blockchain as an important breakthrough for independent innovation of core technologies”, Xi Jinping said.
The INN network was launched in 2017 when Deutsche Bank became the first institution to adopt it.
JP Morgan will continue exploring blockchain and crypto-related initiatives to develop more and new tools that help its users to execute transactions in a simple, fast and also in a secure form.
By María Rodríguez