The unnamed technology company began using the JPMorgan-designed JPM Coin Stabilcoin to send payments worldwide on a 24/7 basis. This prompted the bank to create an Onyx division that would focus on block and digital currency projects, CNBC writes.
According to Takis Georgikopoulos, head of the Interbank Settlement Department, the division employs more than one hundred people, and Umar Faruk, head of JPMorgan’s block development projects, has been appointed as its head.
„We are moving to the stage of commercialisation Bitcoin Formula of these technologies … from research and pilot projects to what can become a real business,“ explained Georgikopoulos.
According to the top manager, JPMorgan is focused on alleviating problem areas in the area of interbank payments. The largest bank in the United States in terms of capitalization is one of the largest participants in this market, transferring more than $6 trillion a day through more than hundreds of countries.
At present, it is not uncommon for payments to be rejected due to errors in account information or other problems. According to Georgikopoulos, the industry can save hundreds of millions of dollars if the regulatory format of data becomes available and it is properly entered.
JPMorgan plans to rebrand the Interbank Information Network (IIN) payment system, which was launched in 2017, based on a blockbuster with JPM Coin as the basis. It will be renamed Liink. The functionality of the network, whose customers are more than 400 corporations and banks, will be supplemented by the ability to check payments before they are sent.
According to Faruk, members of the payment system can charge ‚cents‘ to confirm data for each transaction and save money on correcting errors.
Another area of application for Liink is the processing of paper checks. The bank and its partners now have to rely on an army of employees at the receiving points. JPMorgan believes that this process can be replaced by adding cheque-related information to the check block and abandoning physical media. According to Faruk, the project is scheduled to start in a few months.
„We are talking about hundreds of millions of cheques sent. By moving everything to the block-platform with participants represented by major issuers and reception point operators, we will reduce costs by a factor of four and make cheques available within minutes rather than days,“ Georgakopoulos shared his calculations.
JPMorgan also offers payment infrastructure services for national digital currencies (CBDC).
„Look at China, look at Singapore, they are looking for options for using digital currencies. If we can create a workable model, the probability of acceptance will be ‚very high‘,“ said Georgakopoulos.
The Head of Interbank Settlement said that several more companies may soon be added to the unnamed client, who already uses JPM Coin in their activities.
Recent events give the heads of JPMorgan confidence that the blockchain has passed the phase of „over-expectations“.
„Now we are either somewhere at the bottom of the Gartner hipp cycle frustration or have passed it. This explains JPMorgan’s slowness in trying to scale the technology and put it on a commercial basis,“ explained Farouk.
Recall that in August of this year, JPMorgan sold the Quorum Ethereum block-platform to ConsenSys. A former leading engineer of the bank’s early project called Juno wrote down this decision on the fundamental flaws of Ethereum.
In May, JPMorgan began servicing crypt currency exchanges, including Coinbase and Gemini.
In the same month, ForkLog reported on advice from investment consultants at JPMorgan not to buy bitcoin. In October, the bank’s analysts noted that the first crypt currency outperforms gold as an alternative currency and is significantly more likely to continue growing.