JPMorgan Chase is seeking to adopt distributed ledgers in order to improve the payment system.
A patent was published by the U.S. Patent Trademark Office on Thursday, 3 May 2018. According to the document, the JPMorgan bank describes a modern and upgraded system that will use distributed ledgers to record and store transactions made between financial banks through a peer-to-peer network. Via new tech, the bank wants to offer users “a unique system for recording transactions and storing data.“
Through the patent, the bank explains another benefit the new technology can bring:
“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.”
According to JPMorgan Chase, the blockchain-based technology could update the company’s standard system and give customers the ability to realize cheaper and faster transactions in real time.
“For a cross-border payment to be made from a payment organization to a payment beneficiary, a number of messages must be sent between the banks and clearing houses involved in processing the transaction. This often results in a slow transaction, as there are may be delays in service due to correspondent banking, messaging networks, and clearing intermediaries in the payment flow,” explains the document.
It was somewhat expected that JPMorgan Chase will seek approval for such a project involving interbank payments. Shortly before filing the document, the bank managed to launch a platform on Ethereum-based Quorum.
“Blockchain capabilities have allowed us to rethink how critical information can be sourced and exchanged between global banks,” stated Emma Loftus, the head of global payments at JPMorgan Chase.