On Monday, J.P. Morgan Chase and its two global partners, Royal Bank of Canada and Australia and New Zealand Banking Group Limited declared on they are launching a new payment processing network called Interbank Information Network (IIN), based on blockchain technology. IIN is intended to reduce problems in the global payments process, and it will allow payments to reach beneficiaries faster, with fewer steps and better security. Blockchain technology is a shared ledger of transactions preserved by a network of computers on the Internet, and it is used to support cryptocurrency like Bitcoin. Even though JPMorgan Chief Jamie Dimon has spoken against Bitcoin, he and other banking executives have praised the technology.
“IIN will enhance the client experience, decreasing the amount of time – from weeks to hours – and costs associated with resolving payment delays,” said Emma Loftus, Head of Global Payments and FX at J.P. Morgan Treasury Services. “Blockchain capabilities have allowed us to rethink how critical information can be sourced and exchanged between global banks.”
IIN will be helpful in lowering the cost of processes like securities settlements, loan trading, and international money transfers. JPMorgan and many of its competitors have strategically devoted millions of dollars in IIN for this purpose. The network is driven by JPMorgan’s Quorum blockchain technology, a version of the popular Ethereum model. Other banks will likely join in the coming months.
IBM is another major organization involved in blockchain development, announcing a blockchain project targeting the improvement of international payment efficiency.
JPMorgan expects more banks to support the network in the coming months, which will increase its efficiency by overcoming transaction suspensions. The first two providers to start using IIN are Royal Bank of Canada and New Zealand Banking Group.