JPMorgan revives JPM Coin stablecoin project

An unnamed technology company has begun using JPMorgan’s JPM Coin stablecoin to send payments worldwide around the clock. This prompted the bank to create the Onyx division, which will focus on blockchain and digital-currency projects, CNBC.

According to Takis Georgakopoulos, head of the Interbank Settlements group, the division employs more than a hundred people, and its head is Umar Faruk, JPMorgan’s head of blockchain developments.

“We are moving to the commercialization phase of these technologies… from research and pilots to something that could become a real business,” Takis Georgakopoulos explained.

According to the executive, JPMorgan is focusing on mitigating pain points in interbank payments. As the largest by market capitalization bank in the United States, it is among the most significant players in this market, processing transfers of more than $6 trillion a day across more than a hundred countries.

Currently it is not uncommon for payments to be rejected due to errors in account information or other problems. In Georgakopoulos’s view, once regulatory data standards emerge and are properly entered, the industry could save hundreds of millions of dollars.

JPMorgan plans to rebrand the Interbank Information Network (IIN), launched in 2017 on blockchain, with JPM Coin at its core. It will be renamed Liink. The network’s functionality, whose clients include more than 400 corporations and banks, will be augmented with the ability to validate payments before sending.

According to Faruk, participants in the payment system can levy “fees” for data confirmation on each transaction and save money on correcting errors.

Another application area for Liink is the processing of paper checks. Currently the bank and its partners rely on an army of staff at collection points. JPMorgan believes this process can be replaced by adding to the blockchain information related to the check, and by doing away with physical media. According to Faruk, the project launch is planned for a few months.

“This concerns hundreds of millions of checks sent. By moving everything to a blockchain platform with participants in the form of major issuers and point-of-acceptance operators, we will reduce costs fourfold and make checks available within minutes, not days,” Georgakopoulos shared.

JPMorgan is also ready to offer services to build payment infrastructure for national digital currencies (CBDCs).

“Look at China, look at Singapore; they are seeking use cases for digital currencies. If we can create a workable model, the likelihood of adoption becomes ‘very high’,” said Georgakopoulos.

The head of the Interbank Settlements division said that a non-disclosed client already using JPM Coin could soon be joined by a few more companies.

The latest developments give JPMorgan executives confidence that blockchain has moved beyond Gartner’s hype cycle.

“We are either somewhere at the bottom of Gartner’s hype cycle’s disappointment phase, or we have already passed it. This explains JPMorgan’s measured pace in scaling the technology and putting it on a commercial footing,” Faruk explained.

In August this year, JPMorgan sold the Quorum Ethereum platform from ConsenSys.

A former lead engineer of the bank’s early project, named Juno, wrote off this solution due to fundamental shortcomings of Ethereum.

In May, JPMorgan began servicing cryptocurrency exchanges, including Coinbase and Gemini.

In the same month, ForkLog reported JPMorgan investment advisers’ not to buy Bitcoin. In October, bank analysts noted that the first cryptocurrency outperforms gold as an alternative currency and has significantly greater prospects for continued growth.

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