In 2019, JPMorgan has developed JPM Coin Digital Tokens that enable immediate settlement of transactions between customers in the bank’s wholesale payment business, and tested JPM Coin’s cross-border payments last summer.
A year and a half after its initial announcement, J.P. Morgan’s internal digital currency, JPM Coin, is now being used by a large multinational technology company for cross-border payments.
After jPM Coin’s major development and a series of behind-the-scenes initiatives, JPMorgan saw the economic viability of blockchain technology and founded Onyx, a new business unit with about 100 employees, to focus on its blockchain and digital currency projects, CNBC reported.
“We created Onyx because we believe that we are entering the commercial phase of these technologies and moving from research and development to something that is really commercial,” Takas Georgakopoulos, head of global bulk payments at JPMorgan, told reporters. “
JPM Coin, which is officially used for global cross-border payments, could push the blockchain and cryptocurrency industries into a broader market. With the adoption of Bitcoin by many listed companies and financial institutions, such as Square and PayPal, the mainstream adoption rate of cryptocurrency is increasing.
PayPal, the payment giant, also announced last week that users will soon be able to buy, hold and sell cryptocurrencies directly from their accounts.
Take cross-border payments, which rely on a complex global network of correspondent Banks and are sometimes denied payment because of incorrect account information or other problems. Jpmorgan is one of the biggest players in the industry, moving more than $6tn a day in more than 100 countries. If banks can confirm that they have the correct account information and regulatory format before payment, they can prevent rejections.
J.P. Morgan has a blockchain-based interbank information network that includes more than 400 banks and companies, which has been renamed Liink and will soon be launched as a way to verify payments before making them. Expensive rejection fees can be avoided if the bank can verify that the payment has the correct account information and regulatory format before sending the payment.
Umar Farooq, the newly appointed chief executive of Onyx at jpmorgan chase, says Banks can charge a few cents to confirm each transaction.
Another area is the processing of paper checks, where a large number of people require the processing of e-mails. By sharing digital information about checks, you can skip this step completely and radically simplify the process.
JPMorgan’s JPM coin is now working with a major international technology company to use it for 24-hour cross-border payments.
These developments convinced jpmorgan executives that blockchain was past its inflated hype and would soon start to be applied to real solutions.