Automated Blockchain Settlements Launched by JPMorgan
JPMorgan, a major US bank, has introduced a new feature that allows automatic blockchain settlements. Clients can now program their accounts to handle overdue payments and margin calls using the bank’s JPM Coin system. This innovative service was developed by JPMorgan’s blockchain division, Onyx, and has already been used by Siemens AG to transfer funds to cover shortfalls.
JPMorgan Blockchain System Triggers Settlements
Unlike traditional clearing systems, blockchains enable almost immediate settlements, providing a significant advantage over batch processing. The new feature not only allows for instant fund transfers but also enables companies to execute transactions based on specific conditions.
Naveen Mallela, head of Coin Systems at Onyx, explained that this service offers more configurability and rule-setting options compared to traditional bank accounts.
Banks Start Asset Transfers Early
This recent development builds on JPMorgan’s previous initiatives in blockchain technology. In 2019, the bank launched JPM Coin to expedite US dollar payments between clients. Last year, they also introduced a similar system for euro-based payments that allowed companies to maximize interest earnings.
In addition to JPMorgan’s efforts, other banks such as Citi and Deutsche Bank AG have made strides in using blockchain technology for asset transfers. However, challenges remain in exchanging tokenized assets between banks.
Hot Take: Embracing the Future of Automated Settlements
The introduction of automatic blockchain settlements by JPMorgan signals a significant step towards leveraging distributed ledger technology for seamless financial transactions. As more banks embrace this innovation, it is evident that blockchain is becoming increasingly integrated into the traditional banking sector. This move not only enhances efficiency but also paves the way for further advancements in the realm of programmable payments on a large scale.
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