JPMorgan has created a new dedicated business unit for blockchain and digital currency initiatives, as reported by CNBC on Oct. 26. Dubbed as 'Onyx,' the new unit will be led by CEO Umar Farooq with more than 100 dedicated staffers.
JPMorgan is one of the leaders in the industry, moving more than $6 trillion a day across more than 100 countries. The head of global wholesale payments, Takis Georgakopoulos told CNBC:
“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.”
The banking giant is interested in removing the nitty-gritty of the commercial payment systems that can save thousands of dollars in the process. For instance, during a cross-border transaction, payments get rejected or nullified due to accounting errors. If banking entities have proper accounting systems or regulations prior to confirming a transaction, such types of mistakes can be easily avoided.
JPMorgan takes one step ahead for implementing such systems with its network of more than 400 participating banks and corporations. Initially, termed as Interbank Information Network, it has now been rebranded as Liink that helps in validating payments before they are sent.
Another area that JPMorgan looks towards solving is processing paper checks, that relies on people to handle mail at physical locations called lockboxes. Georgakopoulos says that blockchain technology and digital currency can help remedy this, adding:
“Using a version of the 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.”
Executives at JPMorgan are quite assured that blockchain technology as only hype is a thing of the past. And, its use cases will soon spread like wildfire in real-world applications.