About a year ago, in October 2017, mega-bank JP Morgan announced an Interbank Information Network (IIN) project based on the Quorum platform, a corporate version of the Ethereum blockchain (RTH). . In May, JP Morgan filed a patent for a blockchain-based inter-bank payment network. We are now learning that this project is now ready to come to an end.
A blockchain project in gestation for 11 months
It is a trio of banks, led by JP Morgan, which launched the first tests of this project of interbank payments by blockchain. JP Morgan and the two other banks that initiated the project in October 2017, Australia and New Zealand Banking Group (ANZ) and the Royal Bank of Canada, have now recruited more than 75 new banks to test this new payment system. blockchain, including Societe Generale and Santander Bank according to the Financial Times.
It is therefore an operational test phase that is launched for this interbank information network (IIN), based on Quorum, a private blockchain deployed on Ethereum and developed by JP Morgan in partnership with the development studio EthLab.
This distributed registry, accessible to all banks, will quickly resolve issues such as compliance checks, erroneous payment addresses, or missing data, which can lead to payment delays that can take weeks with the traditional system. .
A new test phase with 14,500 interbank payments per day
Jason Goldberg, a bank analyst at JP Morgan, told the Financial Times:
"Payment is one of the areas where banks are most reluctant to concede non-bank competition (...) The blockchain is a way to keep more of [payment activity] inside. [banks] ".
The more than 75 banks in this phase of testing plan to make about 14,500 payments per day, denominated in US dollars, on this Interbank Information Network (IIN). The number of transactions made through the IIN will increase exponentially as the number of participating banks increases.
Emma Loftus, Head of Global Payments and Receivables at JPMorgan Treasury Services, said the IIN would help protect the mega-bank's business:
"One of the complaints that the anti-banks have reported concerns these friction problems in the existing cross-border payment mechanism (...) Since things like the blockchain address some of these age-old problems, we are able to solve the problems ourselves ".
Here we can see the banks' counterattack against cryptocurrencies: they want to set up a "private super blockchain", which of course can not be used for payments, including cross-border transfers, between banks. In other words, make something new with the old, because if the payments will be faster and easier to solve in case of problems, centralization and dependence on banks will be the same for the citizen-client.
Sources: CoinDesk; NCC; Financial Times || Image from Shutterstock