JP Morgan’s Quorum blockchain powers new correspondent banking network
Hello to the Interbank Information Network (IIN) – using blockchain for the payments process
JP Morgan, and Royal Bank of Canada (RBC) and Australia and New Zealand Banking Group (ANZ), have launched the Interbank Information Network (IIN) – using blockchain for the payments process.
According to JP Morgan, processing global payments is very complex. Multiple layers of communication occur amongst payment participants to verify and process transactions. By using blockchain, IIN will reduce the number of participants currently needed to respond to compliance and other data-related inquiries that delay payments.
Emma Loftus, head of global payments and FX, JP Morgan Treasury Services, says: “IIN will enhance the client experience, decreasing the amount of time – from weeks to hours – and costs associated with resolving payment delays.”
RBC and ANZ are the first two banks to join IIN. JP Morgan says other correspondent banks are expected to join in the coming months, but offers no specifics or timelines.
IIN is powered by Quorum, a permissioned-variant of the Ethereum blockchain, developed by JP Morgan and unveiled last year.
At that time, Amber Baldet, program lead, blockchain centre of excellence, JP Morgan Chase, said it was working with Ethereum “because it has been around a while and banks are familiar with it”.
With Quorum, the firm says all public and private smart contracts are derived from a single, common, complete blockchain of transactions validated by every node in the network.
The plan from last year was not an open-for-all network, as the nodes that run Quorum must get permission from a higher authority to join.
JP Morgan says its Treasury Services business processes approximately $5 trillion in payments every day for clients in more than 100 countries. The business has been investing in technology – “in particular, emerging technologies such as blockchain, machine learning and robotics”.
