How a Banking Consortium is Leveraging Blockchain to Scale Efficiency
How a Banking Consortium is Leveraging Blockchain to Scale Efficiency
J.P. Morgan led banking consortium, Interbank Information Network (IIN), is using blockchain’s network effect to move a staggering volume of workflow to a distributed ledger, as reported by Forbes on May 13, 2019.
Enterprise Blockchain Advancing
In October of 2017, J.P. Morgan (JPM) quietly initiated a tiny network of their industry competition to test ways of effecting payments to each other using a distributed ledger. The platform promised to simplify compliance processes by moving data onto a shared ledger, thereby reducing a procedure that traditionally took a few weeks to a mere few hours.
By 2018, this consortium included massive banking corporations such as Mizuho, Santander, SocGen, and the Royal Bank of Canada; within 11 months, there were 76 members in the IIN consortium.
JPM and Santander were initially a part of the R3 consortium which built an enterprise blockchain platform called ‘Corda’. Many members of IIN are simultaneously working with Ripple Inc to integrate xRapid or xCurrent for inter currency settlements while others are associated with Hyperledger or the Ethereum Enterprise Alliance. In essence, IIN is just a way to improve the efficiency of compliance – not as a payment settlement layer.
Since blockchains allow the participant to not just take be a part of the network but also form the mode of governance, this is an ideal solution to sharing data on a shared ledger. Moreover, these companies are not revealing confidential data, only data they can afford for their competition to know of.
These companies were very resistant to sharing any information; once they are able to get over that obstacle, compliance can be drastically improved across all industries. Gartner estimates the value of locked in the blockchain consortiums to reach $3.1 trillion by 2030
Pro Blockchain, Anti Bitcoin
The constant narrative among larger companies is that there is value in blockchain and distributed ledger, but they are skeptical of Bitcoin’s utility. J.P. Morgan is no stranger to this as their CEO, Jamie Dimon, called Bitcoin a scam – thought he quickly retracted his statement.
Increasingly, we are seeing corporations actually starting teams to study and understand distributed ledger and digital currency. The future of blockchain and digital currency in enterprise is shaping up to be potent in the long term. Despite the comments of those of like Nouriel Roubini, who do not believe in the utility of distributed ledger, the narrative that blockchains can change the world is growing at a rapid pace.
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