JPMorgan Chase reorganizes blockchain units
JPMorgan Chase has created two business units to concentrate on building blockchain-based software and services, and potentially to promote use of the JPM Coin digital currency.
On Wednesday, the bank announced a new brand name, Liink, for its blockchain-based Interbank Information Network. JPMorgan Chase describes that network as an “ecosystem of bank users focused on harnessing emerging technologies such as blockchain to better address the complex cross border payments industry.”
The network currently has 400 bank members. In North America, those members are Bank of Montreal, First Horizon Bank, National Bank of Canada, Royal Bank of Canada and TD Bank.
The bank also started a group called Onyx as a broader venture overseeing multiple blockchain-related ventures. They include Liink, JPM Coin, other initiatives previously handled by the bank's Blockchain Center of Excellence, and certain payment platforms. Onyx has more than 100 employees and is run by Umar Farooq, who was previously the head of digital wholesale payments and blockchain.
The bank named Christine Moy as the global head of Liink. The venture creates Quorum-based software and services to facilitate cross-border payments processed through traditional channels such as Swift. The Liink applications mostly center on troubleshooting international payments.
In the correspondent banking ecosystem, when a payment gets stuck for some reason, it can take weeks of phone calls, emails and faxes to rectify it. Liink is meant to decentralize that and make it much more efficient.
When it was called the Interbank Information Network, the group had already developed a product to help banks resolve sanctions exceptions.
On Wednesday, Liink launched two new products: Confirm, which enables bank members to validate account information for other parties before sending payments to banks in other countries, in the interest of catching fraudsters; and Format, which checks potential payments to make sure they adhere to proper currency formats.
Another application in the pipeline will digitize lockbox systems to help reduce the amount of paper checks banks have to process every month for clients.
According to Moy, bank members of Liink can also deploy their own applications across the network.
“One thing that distinguishes Liink from some of the other networks and consortia is that we have paid particular focus to ensuring that our Liink participants have the opportunity to create new revenue streams,” Moy said.
In some respects, the two new blockchain-focused units are the reincarnation of JPMorgan Chase's previous development of Quorum.
Developers created Quorum, which was once headed by Moy, in 2016 to provide security, access control, privacy and performance components to make using an Ethereum distributed ledger more palatable and useful to banks than any public blockchain.
In August, the bank sold Quorum to the Brooklyn-based blockchain tech and decentralized finance company ConsenSys. In so doing, the bank effectively outsourced future development of Quorum to ConsenSys while becoming its customer. Living outside the bank could make Quorum more appealing to JPMorgan Chase competitors. Quorum is now called ConsenSys Quorum.
Meanwhile, the Onyx group will handle all projects related to JPM Coin, the stablecoin the bank announced it had created in February 2019, in addition to overseeing Liink. The bank said that one large international company, which it would not name, has started using the stablecoin for cross-border payments and that other clients are being onboarded.