JPMorgan blockchain project recruits 70+ banks

JPMorgan blockchain project recruits 70+ banks

An interbank blockchain project led by JPMorgan designed to speed up the exceptions process has recruited more than 70 banks in a move that would make it one of the largest application of distributed ledger technology (DLT) by regulated banks.

The Interbank Information Network (IIN) was piloted back in October 2017 as a way to both address delays in cross-border payments and see off the threat from new non-bank competitors in the space such as TransferWise which currently processes in excess of £3bn in payments per month. 

The idea involves a mutually-accessible ledger built on JPMorgan's private blockchain Quorum that allows permissioned banks to exchange information about compliance checks and other exceptions preventing compelted payments.

While cross-border payments have become more efficient provided nothing goes wrong, any exceptions can take weeks to resolve as all the different correspondent banks involved need to be contacted on an individual basis. Projects such as the IIN are hoping that these payment problems can be more speedily resolved by just checking the distributed ledger.

Central to the concept is the participation of other major banks. The first two banks to sign up, Australia-based ANZ and the Royal Bank of Canada, have been trialling the service for the last 11 months and now look set to be joined by 71 other banks, including Santandar and Societe Generale.

More than 14,500 dollar-denominated payments are expected to be put through the newly enlarged network on a daily basis as the project looks to build scale. 

Comments: (2)

A Finextra member
A Finextra member 25 September, 2018, 14:531 like 1 like

Interested to see how this would be different from/better than solutions using SWIFT GPI Tracker to monitor payment statuses.

A Finextra member
A Finextra member 30 September, 2018, 16:10Be the first to give this comment the thumbs up 0 likes This highlights the deficiencies of the store and forward messaging system used by Swift where payments are initiated without certainty they will reach their destination, pass screening checks along the way or with knowledge of fees - it is surprising that it has taken so long for a utility like this to be developed and it is an indication that banks are taking more seriously the money laundering risks in cross border payments. Still, IIN is an information system rather than a payment system and it is curious it is on a blockchain, it is unclear what this adds over a simple database .