JPMorgan Files Patent for Blockchain-Powered Payments
JPMorgan Chase filed a United States Patent Application for a cross-border payment network that utilizes blockchain technology.
The network would seemingly use the innovative technology to enable banks to send transactions to one another without borders inhibiting them.
The patent is titled, “Systems and Methods for the Application of Distributed Ledgers for Network Payments as Financial Exchange Settlement and Reconciliation.”
Further, it was originally submitted in October, but the US Patent and Trademark Office made it public on Thursday. It outlines a system that would essentially use distributed ledger technology (DLT), such as blockchain, to keep track of payments sent between financial institutions using a peer-to-peer network.
According to the bank, the technology use would provide “a unique system for recording transactions and storing data.”
Moreover, JPMorgan noted in the application that cross-border payments require “a number of messages.” They must be sent between the bank and clearing houses involved in the transaction.
Consequently, this delays and restricts availability to the funds.
On the other hand, the transaction on the blockchain would eliminate high costs. In addition, this would provide a system for accurately logging the transactions. And process payments in real time with a verifiably true audit trail.
Additionally, the blockchain-powered system would be able to confirm that a network payment is successful “in one consolidated posting across multiple financial institution entities and branches, instead of in many separate instances.”
Distributed ledger technologies have the potential to rehaul payment, clearing and settlement systems for banks internally and across borders.
Last March, the financial messaging provider SWIFT collaborated with 34 global transaction banks in testing a DLT proof of concept to help with Nostro account reconciliation.
This April, Santander became the first bank globally to implement a customer-ready blockchain-powered international payments network. It uses the technology of Ripple’s real-time gross settlement system. In addition, it beat a host of rival banks, including institutions in South Korea and Japan.
A Change of Heart for JPMorgan?
This may come as a surprise given JPMorgan CEO Jamie Dimon’s tirade about bitcoin several months ago.
Back in September, Dimon made headlines when he threatened to fire any JPMorgan employees who will trade bitcoin. He called the cryptocurrency a fraud and a bubble that would eventually “blow up.”
JPMorgan is one of the biggest banks in the US. It holds the 2nd largest position by market cap worldwide.
However, Dimon has been hostile about cryptocurrencies in recent years. When the price of bitcoin surged in late 2017, he insisted that the digital currency was a fraud.
Dimon continued to attack bitcoin for several weeks. He called investors stupid and that they would pay the price for investing in the crypto market.
However, 2018 saw Dimon in a more placatory approach. The bank acknowledged the importance of the crypto market as a whole. And it seems that JPMorgan is looking to tap into the lucrative remittance market, which is worth billions of dollars a year.
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