More than 75 multinational banks have joined the JPMorgan blockchain platform to rival R3, or any other company outside of the banking sector, in a bid to keep payments ‘in-house’ via the Interbank Information Network (IIN).
JPMorgan, the largest bank in the U.S., departed from the R3 consortium after a year’s membership, and together with the Royal Bank of Canada and the Australia and New Zealand Banking Group (ANZ), in October 2017 they began developing the IIN payments platform.
Built using JPMorgan’s Ethereum-based private blockchain Quorum, in partnership with development studio EthLab, the IIN aims to transform the payments process for the entire banking industry, allowing banks to share payment information and resolve problematic transactions swiftly, without the need of intermediaries.
Further to this, the IIN platform enables peer-to-peer messaging for direct communication between the banks, thus becoming a direct rival to SWIFT, what is currently one of the most commonly-used global payments rail. According to a report by the Financial Times on Tuesday, JP Morgan analyst, Jason Goldberg stated:
“Payment is one of the segments banks worry most about in terms of ceding to non-bank competition.” adding “Blockchain is a way to keep more of that [payments business] in-house.”
Interestingly, last month at a press conference in Buenos Aires, Global Chief Information Officer at JPMorgan Chase, Lori Beer said:
“In a few years blockchain will replace the existing technology, today it only coexists with the current one,”
With the swathe of banks that JPMorgan has successfully on-boarded, including major financial institutions, Goldman Sachs, Santander and Société Générale, the banking behemoths can now expedite processing times to compete with the emerging ‘cross-border payments’ fintech sector.
Partners including the National Bank of Canada and Pfizer Inc. began testing the JPMorgan blockchain platform in April. Now with considerably more members, the IIN will begin sending US $14,500 payments through the network daily, and intend to launch payments in other currencies in the future.
Other banks are spearheading blockchain initiatives of their own, such as RBS that has led a consortium to develop Cordite, another blockchain solution to unite the banking sector. However, just last week key members of its RBS blockchain team jumped ship to startup an R3 venture studio project, Chorum.
Its new partner Santander has already launched its own commercial banking blockchain app for international payments developed by Ripple, and as mentioned in a previous BCTech Report, is one of the nine major European banks behind we.trade that is built on IBM’s Hyperledger Fabric.