JPMorgan Files Patent for Interbank Blockchain Payment Network
US bank JPMorgan is seeking to use distributed ledgers to keep track of payments that are sent between banks using a peer-to-peer (P2P) network.
In a patent application published by the US Patent and Trademark Office on Thursday, JPMorgan wants to develop a blockchain-based network to speed up the process of cross-border payments.
Initially filed in October, the patent describes systems and methods for the application of distributed ledgers for network payments as financial exchange settlement and reconciliation.
The system is aimed to be “a unique system for recording transactions and storing data.” As per the filing some specific information in the patent –
“In one embodiment, a method for processing network payments using a distributed ledger may include: (1) a payment originator initiating a payment instruction to a payment beneficiary; (2) a payment originator bank posting and committing the payment instruction to a distributed ledger on a peer-to-peer network; (3) the payment beneficiary bank posting and committing the payment instruction to the distributed ledger on a peer-to-peer network; and (4) the payment originator bank validating and processing the payment through a payment originator bank internal system and debiting an originator account.”
Like other banks, JPMorgan has done feasibility tests with various uses of blockchain technology. Last year, the bank launched its distributed ledger and smart contract platform Quorum, which it is looking to establish as a legal entity of the bank.
The big US bank believes Quorum has the potential to revolutionize the interbank payments business and invited other banks to join a newly-formed Interbank Information Network (IIN) alliance to try out the platform. ANZ and the Australian arm of Royal Bank of Canada were the first to sign up.
At the time, Emma Loftus, head of global payments and foreign exchange for JPMorgan Treasury Services, commented: “IIN will enhance the client experience, decreasing the amount of time – from weeks to hours – and costs associated with resolving payment delays. Blockchain capabilities have allowed us to rethink how critical information can be sourced and exchanged between global banks.”
In the intervening period, JPMorgan has revised its plans for Quorum, drawing up plans to spin off the business as an independent entity to capture new use cases beyond the banking business. The bank has also created a Blockchain Center of Excellence (BCOE) to plan its strategies.
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