Over 70 banks join JPMorgan to trail blockchain payments

Tuesday 25 September 2018 10:50 CET | News

More than 75 of the world’s biggest banks have joined the Interbank Information Network (IIN) that has been testing blockchain tech in the payments space.

The network has been trialled for 11 months by JPMorgan, Royal Bank of Canada, and ANZ to see if distributed ledger technology can speed up payments that have errors or require additional compliance checks. The banks expect to put about 14,500 US dollar-denominated payments a day through the enlarged network, according to Financial Times.

Simple cross-border payments involve a chain of three or four banks, because banks can only send payments directly to other banks who they have “correspondent” relationships with. When the instruction has missing or faulty information, or banks have to make additional compliance checks, they have to send queries back through the payments chain, bank by bank, until it reaches someone who has the information and can send it back along the same path.

The banks trialled blockchain to fight the threat of new payments rivals. According to the global head of global payments and receivables at JPMorgan Treasury Services, the IIN would help JPMorgan protect their businesses. As non-banks have been pointing out to frictional processes in the existing cross-border payment mechanism, blockchain could enable banks address some of these age-old problems.

JPMorgan plans to continue adding banks, and also hopes to expand the IIN offering into other payments in non-US currencies, the online publication concluded.

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Keywords: Interbank Information Network, IIN, blockchain, payments , cross border payments, corresponding bank, JPMorgan
Countries: World