75 banks have joined the blockchain payment network patented by JPMorgan, according to the Financial Times. The network is expected by its members to eventually be able to process 14,500 US dollar-denominated payments a day.
Interbank Information Network
JPMorgan filed the patent for the Interbank Information Network in October 2017 and published it in May 2018.
The patent describes a generic distributed ledger-based payment system and lists the ways in which it can create faster transactions. The main advantage, according to the bank, is being able to cut out middlemen; with the traditional system, even simple international payments often have to go through a chain of several banks.
Emma Loftus, global head of global payments and receivables at JPMorgan Treasury Services, said that communication issues can cause major delays in money transfer, and blockchain technology allows companies to solve this problem.
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The IIN allows users to monitor transactions and communicate in case of a problem, allowing speedy resolutions.
JPMorgan originally launched the service with two partners – the Royal Bank of Canada and Australia, and New Zealand Banking Group Limited. Since then, membership numbers have reached 75, including big institutions such as Société Générale and Santander. According to Umar Farooq, head of blockchain at JPMorgan, the IIN is the biggest inter-bank blockchain system which is currently live.
In May 2018, a source from JPMorgan told Finance Magnates that the bank is working on a blockchain-based internal trading system for debt.
Banks and Blockchain
Richard Chambers, COO of blockchain investment platform InvestX and former director at Royal Bank of Scotland’s Corporate Transactions Team, commented on the news: “JP Morgan’s Interbank Information Network is one example where the banks are using blockchain technology to even the playing field versus fintech startups such as TransferWise which has a lower cost base. Despite popular opinion, large banks have been looking at blockchain for years for various use-cases across payments, settlements and issuance.”