JPMorgan announced today that over 70 banks have tied up with them to be a part of the interbank blockchain project designed by the institution, according to a report published by the Financial Times. The platform is titled, “The Interbank Information Network” [IIN].
Big names in the financial sector like the French multinational institution, Société Générale, and the retail banking giant, Santander have also entered the venture.
The report stated that these banks were turning to blockchain as a solution, to overcome competitors in its field in order to become one of the largest appliers of distributed ledger technology in the regulated banking space.
The IIN project was started by JPMorgan back in October 2017 to overcome the delays in cross-border payments in the existing systems. The banking giant initially partnered with two other banks, the Royal Bank of Canada and Australia and New Zealand banking group [ANZ], to trial run the project for 11 months. The intention of the trial was to analyze if blockchain technology can be used to speed up cross-border payments, that require additional compliance checks.
It stated that the organization was looking at blockchain as a solution to quickly resolve problems related to faulty address, missing data, which otherwise can hold back payments up to a week. In the future, the bank is looking at pushing about 14,500 “US Dollar-denominated” payments on the newly expanded Interbank Information Network, it stated.
Through this move, the financial institution wants to gain a competitive edge over new non-banking startups like the UK-based startup Transferwise that currently processes over £3 billion every month.
JPMorgan’s Analyst Jason Goldberg said:
“Payment is one of the segments banks worry most about in terms of ceding to non-bank competition. Blockchain is a way to keep more of that (payments business) in-house.”
The platform aims at solving the aforementioned problems by allowing access to all the information on the distributed ledger, that banks can query in real time. According to the media, IIN also facilitates Peer-Peer [P2P] messaging.
The banks also revealed that as the number of participating banks increase, the number of transactions will exponentially increase on the network.
Umar Farooq, head of blockchain at JPMorgan said:
“If you look at it (IIN) terms of what blockchain applications are live, there are very few and most of them are either in pilot or proof of concept stage. This is the single biggest.”
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