JP Morgan Chase has announced that its JPM Coin stablecoin will be used for the first time this week by a major technology customer to send payments worldwide.
CNBC reports that the company has created a new company called Onyx to support its efforts with blockchain and digital currency solutions.
JP Morgan’s global wholesale payments manager, Takis Georgakopoulos, said:
“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business”.
It is a business unit with more than 100 dedicated employees that will experiment with new solutions that can generate profits.
JPM Coin, JP Morgan’s solution for cross-border payments
JP Morgan will focus on the shortcomings of cross-border wholesale payments, particularly in those areas where hundreds of millions of dollars could be saved through better technology solutions than those currently available. To date, the bank transfers more than $6 trillion a day to more than 100 countries through a network of more than 400 participating banks and companies.
In fact, cross-border payments are currently based on a complex network of banks which often leads to inefficiencies, malfunctions, information errors or other problems.
The aim is to reduce these issues in order to reduce the costs of running the system.
According to the CEO of the new Onyx company, Umar Farooq, banks could only charge a few cents for each cross-border transaction, saving money and creating a profit-making model.
Even paper cheques could benefit: according to Georgakopoulos, hundreds of millions of cheques could be handled with blockchain-based solutions, saving up to 75% of costs and making cheques available in minutes rather than days.
Georgakopoulos also revealed that JP Morgan is working on new payment channels with central bank digital currencies, to the extent that if a working model is developed, he believes the likelihood of CBDC adoption will become very high.
“If you think about blockchain, we are either somewhere in the trough of disillusionment or just beyond that on the hype curve. That’s why at JPMorgan we’ve been relatively quiet about it until we were ready to scale it and commercialize it”.