JP Morgan and Siemens for a payment system on blockchain

JPMorgan Chase is working with the German industrial group Siemens to develop a blockchain-based payment system. 

Onyx, the blockchain platform of JP Morgan and Siemens

The Financial Times reports that the system will be used to transfer money between Siemens’ accounts. At first, it will be activated only for US dollars, but support for euros should also be activated later on. 

The application they are working on would aim to automate the various actions required during the registration and verification of payments. 

The platform will be based on JPMorgan’s blockchain infrastructure, Onyx, of which Siemens will be the first “anchor client.”

According to Onyx’s global head of con system, Naveen Mallela, the company already has a full pipeline of clients for this system. He also added that the new infrastructure would accept both programmable payments and direct debits or standing orders. 

JP Morgan in the blockchain sector

JP Morgan has already been active in the blockchain sector for years, although it prefers centralized and permissioned systems that would theoretically be better called DLT rather than true blockchain. 

According to the leader of Siemens’ payments division, Heiko Nix, current payment and safekeeping systems could be sufficient should the business remain at current levels. But as the industry grows, new types of business present greater challenges that require next-generation solutions. 

Onyx, in fact, is a next-generation solution that allows for the exchange of values, information, and digital assets, and which JP Morgan is looking to propose to other companies, in addition to Siemens. 

Centralized DLTs are not truly decentralized blockchains, but they allow a degree of automation that is simply impossible with traditional systems. They can also be basic standards that can be used by mutual agreement between different parties, companies, and software. 

Yes to smart contracts, no to cryptocurrencies

However, it is unlikely that platforms such as this can use cryptocurrencies. Also, in the case of using stablecoins pegged to fiat currencies, it is conceivable that they will use their own tokens and not third-party ones. 

Probably the key point is smart contracts, which allow you to safely create and manage automation that was previously too risky to manage with traditional systems.