JPMorgan Continues to Explore Blockchain for Cross-Border Payments, Having Signed 220 Banks Worldwide Along the Way

On April 21, it was revealed that JPMorgan Chase, the United States' largest bank with over $2.62 trillion in assets, is planning to widen the use of its blockchain system.

Specifically, JPM is adding new features to its Interbank Information Network, which is now used by more than 220 banks across the globe.

JPM's experiments with blockchain date back to 2016, when the banking behemoth published a white paper for Quorum, its private blockchain platform built on the Ethereum protocol.

"Historically, correspondent banks communicate one-way, bank-to-bank, but we have transformed their interaction. When a payment detail is flagged for confirmation, different parties can interact simultaneously, requesting and sharing information."

As of March 2019, more than 220 banks worldwide have signed up as members of the IIN, including banking powerhouses such as Sumitomo Mitsui Banking Corporation, Crédit Agricole - the world's largest cooperative bank by turnover - and Banco Santander.

The network is expanding at a swift pace: More than 60 banks joined it just within the past few months, given that the IIN consisted of 157 member banks as of January this year.

"IIN is not a competitor to Ripple unless it begins to sweep all the banks in the world onto their network, which could be difficult for JPM given their historical reputation. Ripple, Circle, and Transferwises advantage may be that they are third-party intermediaries, not banks themselves."

According to Seo, the U.S. banking giant receives 100,000 to 200,000 enquiries regarding stuck payments every year, and most of them are international.

"There can be many steps between multiple correspondent banks in sending a payment from the US to China, for example. And when a query pops up, the question becomes: which bank has the full and complete information? Banks start sending emails but some banks don't like to respond that way because email may be insecure. So, then it's phone calls between banks in very different time zones. The query can start ping-ponging around. When it gets painful, it gets really painful. A payment that should have taken minutes can take many days to complete as requests for information ping-pong between the banks."

Thus, although the banking giant's other recent crypto project, JPM Coin, was received quite poorly by the community, part of which deemed that JPM Coin is not a cryptocurrency at all, JPMorgan continues to explore the field of blockchain - and given the large amount of bank who have co-signed its project, the U.S. financial titan might be headed in the right direction.