JPMorgan has officially launched its digital currency, JPM Coin, with a large tech firm on board.
First piloted two years ago with more than 400 participating banks, including the Monetary Authority of Singapore, JPM Coin will be used by a large unnamed client to power cross-border payments, JPMorgan head of wholesale payments, Takis Georgakopoulos told CNBC.
“At JPMorgan Chase, the firm’s digital currency JPM Coin is being used commercially for the first time this week by a large technology client to send payments around the world.”
The real-world use cases for the JPM Coin are endless, says Georgakopoulos, but JPMorgan is focusing on three early applications for the digital currency.
First, JPMorgan is focused on relieving the pains of cross-border payments. The bank, which processes $6 trillion worth of transfers per day, has been using an unreliable, complex network of correspondent banks, which may reject the transfers for various reasons, says Georgakopoulos. The cost of rejections can add up quickly to millions of dollars.
“If banks could confirm that payments have the proper account information and regulatory format before they are sent, they could prevent expensive rejections.”
Another application of the JPM Coin is in the processing of paper checks. With hundreds of millions of checks getting sent each day, processing them could be manually and financially intensive. Processing could be radically simplified by utilizing blockchain technology.
“Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”
The bank has also created Onyx, a new business that will be dedicated to researching real-world applications for blockchain and cryptocurrency initiatives, and the commercialization of these technologies.
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