Led by JP Morgan, the blockchain payments trial that was launched by a trio of banks has enticed 75 banks globally for seamless and faster interbank settlements. The Interbank Information Network initiated as a blockchain experiment aimed to minimize the participants and friction typically involved in a global payments transaction.
The blockchain is developed using Quorum, an Ethereum-based private blockchain developed by JP Morgan in partnership with development studio EthLab. JP Morgan was the first one to deploy the system in October 2017, according to report by CCN at the time, the largest bank in the United States quit banking-centric blockchain consortium R3 in 2016, presumably to build on the development of its own in-house blockchain.
Eleven months later, the Interbank Information Network was formed by a trio of members including the Royal Bank of Canada and Australia and New Zealand Banking Group (ANZ). According to a Financial Times report, the network now has grown to rival R3 as they add ‘more than 75 of the world’s biggest banks.’
The trail entails assessing the feasibility of a common ledger accessible by all participating banks, that will, in turn, reduce the number of participants in a simple cross-border payment chain. The bistro accounts and the corresponding banking partnerships in different regions currently used employs three or four middlemen firms for an international payment to be wired across the globe. While blockchain tech can instantly communicate and resolve issues that might take up to a fortnight to resolve otherwise.
JP Morgan banks analyst Jason Goldberg told the publishing:
“Payment is one of the segments banks worry about most about in terms of ceding to non-bank competition. Blockchain is a way to keep more of that [business] in-house.”
Furthermore, The FT report states that the network employs peer-to-peer financial messaging rivaling the likes of the most commonly-used global payments rail operated by SWIFT. With the participation of nearly 80 banks, the IIN is expected to process about 14,500 USD-denominated payments a day. The network plans to support non-USD currencies payments in the near future.
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