In a new development, Siemens AG and digital assets market maker B2C2 are the most recent significant companies to use JPMorgan Chase’s blockchain-based payments network to conduct real-time foreign currency (FX) transactions around the clock.
JP Morgan’s Blockchain
According to a Bloomberg story, Siemens and B2C2 can settle cross-border transactions in US dollars, British pounds, and euros with almost instantaneous finality thanks to the technology called Kinexys Digital Payments.
Kinexys wants to remove the friction associated with traditional FX payment methods, which usually only function during the week and sometimes take days to process.
The connection gives B2C2, a division of SBI Holdings in Japan, a significant edge in managing liquidity during volatile cryptocurrency markets.
“This gives us the ability to move cash 24/7, seamlessly,” said Thomas Restout, B2C2’s chief executive officer. “For risk management, it’s a key piece.”
Because traders are frequently unable to deploy funds while banks are closed, Restout continued, being bound to traditional banking rails can be restricting when cryptocurrency markets move significantly over the weekend.
Also Read: JPMorgan And Coinbase To Link Bank Accounts Directly To Crypto Wallets
What does this mean?
This change reflects an increasing trend of big businesses using blockchain-based payment systems to expedite international money transfers.
Distributed ledger solutions address long-standing inefficiencies in cross-border payments by promising quicker settlements, reduced back-office expenses, and improved cash visibility. Blockchain networks have been tested by financial institutions for years, but few have yet to achieve steady commercial size.
JP Morgan’s Blockchain
JPMorgan’s Kinexys network was introduced in 2019 and presently handles about $3 billion in transactions per day, which is a small portion of the $10 trillion that the bank’s larger payments business handles everyday. However, as big businesses seek to update their cash and liquidity management, usage is growing.
The Qatar National Bank Group (QNB), Qatar’s largest bank, announced that corporate payments will be facilitated in Qatar through a blockchain network with payments partner JPMorgan Kinexys.
JP Morgan has been relentless in pushing the frontiers of innovation, as Kinexys is designed to optimise the financial efficiency of large multinationals through improved interoperability.
Trimont has recently started automating faster loan payment processing by using JPMorgan’s Kinexys blockchain technology. Trimont has approximately $730 billion in assets under management.
The system now automatically performs the tasks of detecting, validating, and routing funds in a matter of minutes as opposed to the standard two-day settlement period of traditional systems.