The corporate sign in front of the JP Morgan Chase & Co office building on Park Avenue, New York City, October 29, 2016. Felix Lipov/Shutterstock
Banking giant J.P. Morgan Chase will finally be using its JPM Coin for commercial transactions starting this week, CNBC reported on 27 October
According to the report, the bank’s in-house stablecoin is already being used for global payments by a major technology firm, though J.P. Morgan did not name the company in question. The bank has also created a dedicated business unit for cryptocurrency and blockchain, called Onyx, as it expects these technologies to become commercially viable, and that more commercial clients will wish to sign up to use the JPM Coin in the future.
Takis Georgakopoulos, J.P. Morgan’s global head of wholesale payments, said in a statement:
“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business.”
Headed by Umar Farooq, who was named CEO of Onyx, the new business unit already has more than 100 employees. In addition, J.P. Morgan’s blockchain-based Interbank Information Network, which currently has over 400 banks and corporations as its members, will also be rebranded as Liink. The network is expected to reduce banks cross-border wholesale payments, and will soon launch a new way to validate payments before they are sent.
J.P. Morgan also revealed that it could soon use blockchain technology to improve the outdated system for processing “hundreds and millions” of paper checks. If banks are able to send digital versions of paper checks, J.P. Morgan predicts that would save them around 75% of the costs currently associated with sending and processing such payments. While such a project is months away from commercial launch, Georgakopoulos said in a statement:
“We’re talking about hundreds of millions of checks being sent. Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”
The CEO of Onyx noted that, while the bank’s development of its stablecoin appeared “slow”, J.P. Morgan was simply waiting “until we were ready to scale it and commercialize it”. First announced in February 2019, the bank started client trials of its JPM Coin back in June 2019. The stablecoin was developed on Quorum, J.P. Morgan’s private version of Ethereum, which was acquired by development firm ConsenSys earlier this year.