JPMorgan Chase & Co., in its Friday, June 23 statement, confirmed the internal use of JPM Coin to settle payments approximating $300 billion. The financial giant indicated that it went live four years after launching the Coin Division in 2019 with the inaugural blockchain transaction involving a Europe-based corporate client.
JPMorgan Successfully Execute Payment Settlement Using JPM Coin
The transaction executed on Wednesday, June 21, involved the German conglomerate Siemens in processing the Euro-denominated payment by leveraging the internally available JPM Coin. The US-based investment bank revealed that the successful execution of the transaction affirmed the integration of a major blockchain project into its conventional banking system.
A publication by Bloomberg on June 23 illustrated that JPMorgan utilized the blockchain-based permissioned payment system to integrate euro-denominated payments for its institutional clients. A spokesperson for the investment bank detailed the permissioned blockchain involves a distributed ledger that is publicly inaccessible. Its availability through the JPM Coin is limited to the bank’s institutional clients for settling payments.
The communication conveyed by Basak Toprak, who heads the Coin Systems division in Europe, the Middle East, and Africa (EMEA) region, that it expanded the blockchain platform to include Euros alongside the US dollars. Toprak reported that the June 21 transaction was the initial euro-denominated transaction involving JPM Coin on the forum.
JPMorgan Coin System Facilitating Instant Transactions
The EMEA regional executive indicated that the permissioned blockchain system facilitates settling wholesale payments for corporate clients. He added that larger multinational firms could initiate euro-denominated transactions instantly.
JPMorgan’s Toprak added that the 24/7 access to the JPMorgan accounts yields is set to improve the conventional banking transactions from the previous arrangements where processing transactions was limited to business hours. He attributed the JPM Coin system yielding cost benefits in the timely settlement since the clients could earn additional interest on deposits.
Toprak revisited the JPMorgan journey in blockchain that began by launching JPM Coin in 2019. Today, it runs as an alternative payment rail and is estimated to have concluded $300 billion worth of transactions. He admitted that the figure is still small, considering the daily payment volume averages $10 trillion.
Blockchain-based Platform Reliable to Settle Wholesale Payment Transactions
JPM Coin is a constituent of the bank’s blockchain-based platform, identified as Onyx Coin Systems. Onyx’s establishment in 2020 aimed to improve the quality that JPMorgan offered in wholesale payment transactions. By April 2023, JPMorgan realized $700 billion in short-term loan transactions.
The news of JPMorgan completing the euro-denominated payment via the JPM Coin coincides with the investment bank facing a $4 million fine by the US Securities and Exchange Commission (SEC). The regulator alleges the bank engaged in mismanagement of internal communications.
The successful use of the permissioned blockchain will help JPMorgan avoid such fines imposed for the reportedly 2019 mistaken deletion of 47 emails relating to the retail banking group between January to April 23, 2018. SEC held that financial institutions should strictly observe the three-year period outlined by the US securities laws. The switch to blockchain-based systems for corporate clients will eliminate such instances because it uses the time-stamped block method. It runs a dual record system that directly documents the transaction history.
SAP Evaluates USDC Use in Cross-Border Payments
JPMorgan clients join the expanding community of individuals leveraging crypto to conduct business. A Thursday, June 22 communication from the German software firm SAP indicated it was leveraging Circle’s US Dollar Coin (USDC) to test cross-border payments. As the largest non-US software company by earnings, its integration of stablecoin USDC to hasten overseas remittances will benefit small and medium enterprises (SMEs).
The integrated campaign’s executive at Circle, Peter Schroeder, lauded the move by SAP to embrace digital money blended with blockchain technology. USDC involves a stablecoin pegged to the dollar.
SAP indicated that its customers could receive paymentas in USDC, conifers as play money in testing the payment option. SAP suggested that the test will leverage a separate blockchain besides Ethereum. Nonetheless, the test will exclude the ERC-20 dollar tokens.
The move by JPMorgan and SAP reignites the previous utilization of blockchain in processing and remitting digital assets. Before the banking crisis witnessed in the US, Signature Bank was facilitating crypto to fiat currency.
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