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JPMorgan Tests Commercial Use of JPM Coin by Launching New Blockchain Division Onyx
By launching its JPM Coin, the banking giant aims to eliminate all the hassle of payment settlements and verification that comes with the traditional paper-based structure for its cross-border payments.
On Tuesday, October 27, Wall Street banking giant JPMorgan finally tested the commercial utility of its native stablecoin JPM Coin. This is for the first time that a major technology giant is testing global payments using blockchain-based digital currencies.
The test comes nearly 18 months after JPMorgan announced its JPM Coin back in February 2019. As reported by CNBC, the investment banking giant also announced its business unit called Onyx specifically for blockchain and digital currency projects. Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, said Onyx has over 100 dedicated staffers at this point. He further added:
“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business”.
As the JPM Coin went live on Tuesday, Georgakopoulos reiterated the purpose behind its launch. He also added that the bank focuses on using its native stablecoin for its wholesale payments business. The use of JPM Coin will help the banking giant in mitigating any cross-border inefficiencies that arrive with traditional payments.
Besides, the cross-border settlements times will reduce drastically to a few seconds instead of 1/2 days. Currently, JPMorgan’s whole payments division processes $6 trillion every single day across 100 countries. The use of JPM Coin will eliminate several complexities that arrive with traditional payments.
Rebranding the Interbank Information Network to Liink
Since 2017, JPMorgan has been pilot testing its blockchain-based Interbank Information Network. Today, the network consists of 400 participating banks and big corporations. On Tuesday, JPMorgan said that it will rebrand this network as Liink to validate cross-border payments before they are sent.
The Liink blockchain network will send a digital version of paper checks thereby saving a massive 75% of the costs associated with sending and processing cross-border payments. Onyx CEO Umar Farooq also said that this will also create a model of earning money for network participants. Georgakopoulos further explained it saying:
“We’re talking about hundreds of millions of checks being sent. Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”
Note that the commercial launch of Liink might take a few months from now. Georgakopoulos also noted that they are looking at creating new payment rails for central banks across the globe. He added:
“Look at China, you look at Singapore, they’re looking for use cases for digital currencies. If we are able to develop a model that works, we think the probability of adoption becomes very high.”
JPMorgan which has been an early critic of Bitcoin is also slowly warming up to public digital currencies. JPMorgan analysts recently told the Fortune publication that Bitcoin could triple from these levels. The bank’s optimism comes as more big players and financial institutions make fresh investments in Bitcoin.Altcoin News, Bitcoin News, Blockchain News, Cryptocurrency news, News
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