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Weeks after experimenting with blockchain-based payments between satellites in space to see if two machines could transact autonomously, investment bank JPMorgan is now using blockchain technology to improve funds transfers between banking institutions globally. JPMorgan has now launched a new solution called Confirm to help bring down the number of “rejected or returned transactions caused by mismatched payment details,” according to the investment banking company. As a result, the solution will lead to lowering costs for both the sending and receiving banks.
“JPMorgan getting into blockchain is going to help a lot on the institutional side of fund transfers. It is looking to resolve the clearing and settlement problem which happens in the bank-to-bank transfers and takes multiple days to settle. With blockchain, JPMorgan and banks will be able to settle it in near real-time,” Ashish Agarwal, a blockchain expert and Founder of PayO — neo banking platform for SMEs – told Financial Express Online.
Confirm is a global account information validation application on JPMorgan’s blockchain network through which partner banking institutions, according to the company, will be able to request confirmation of the beneficiary account information and receive responses directly from other participating banks receiving the requests in near-real-time. Once the information is validated, the payment may be sent through JPMorgan’s clearing solution PayDirect to route the payment. The investment bank is working with 12 Taiwan banks for testing the use of blockchain technology to improve global funds transfers. JPMorgan had in February this year, according to a news report, partnered with State Bank of India to speed up overseas transactions for customers through the bank’s blockchain technology.
Last month, Visa had announced the use of cryptocurrency USD Coin — a stablecoin, which means its value is pegged directly to the US dollar — to settle transactions on its payment network on a pilot basis. Apart from Visa, institutions, and entrepreneurs including Mastercard, BlackRock, PayPal, Square, Tesla’s Elon Musk, Jack Dorsey, and more having been either engaging or dabbling with cryptocurrencies. PayPal had also last month announced that its US customers will be able to convert their Bitcoin, Ethereum, Litecoin, or Bitcoin Cash to US dollars to complete the transaction.