A major international customer that the bank will not name started using JPM Coin this week. JPMorgan also renamed its 400 bank cross-border payment settlement network.
JPMorgan Chase's digital currency, JPM Coin, is being used commercially for the first time this week to send cross-border payments 24 hours a day, the bank said on Tuesday. The user is a major international technology company that the bank will not name - other customers are being shipped, the bank said - but the development comes as JPMorgan appears to be pushing its blockchain efforts into its next phase.
The bank this week renamed its interbank information network Liink. The network has more than 400 banks - including four of Canada's six largest - as customers, and has created a 100-employee business unit, onyx, to oversee liink, JPM Coin and other ventures previously under the umbrella of the blockchain Center of Excellence.
"We are launching onyx because we believe we are moving to a period of commercialization of these technologies, moving from research and development to something that can become a real business," said Takis Georgakopoulos, global head of wholesale payments at JPMorgan Chase, to CNBC .
Liink, whose Quorum-based applications focus on troubleshooting problems with cross-border payments, launched two new products Wednesday. Confirm, which allows users to validate account information before sending payments to banks in other countries, aims to reduce the cost of errors and potentially reduce fraud. A second product, Format, ensures that payments adhere to the correct currency and regulatory requirements.
Liink participants with experience with payments in certain regions can build an application at the top of the network and deploy it globally. That peer-to-peer functionality could serve as a differentiator, said Christine Moy, Liink's chief executive.
"We pay a special focus to ensure that our Liink participants have the opportunity to create new revenue streams," she told American Banker.
Moy told Coindesk that Liink's goal is not to replace the Society's Worldwide Interbank Financial Telecommunications network, but to complement it.
Liink is not open source like Quorum or R3's Corda network, but JPMorgan is encouraging collaboration within the network, as well as expanding it to fintechs and other ecosystem companies.
In addition to Liink, Onyx is looking at a project - months from commercial launch, according to the newly appointed CEO of Onyx, Umar Farooq - that would renew the processing of paper checks in a system that now has people to deal with physically with the mail in the vaults to one that allows banks to exchange digital information associated with a check.
"Using a version of the blockchain with participants being the main check issuers and the main lockbox operators, it is possible that we can save 75% of the total cost to the industry today, and make checks available in minutes instead of days", Georgakopoulos told CNBC.
JPMorgan is also considering creating separate payment tracks for central banks that want to launch their own digital currencies. "If we are able to develop a model that works, we think the likelihood of adoption becomes very high," said Georgakopoulos, pointing to Singapore and China as examples of nations looking for use cases.
The movements come at a time of high action and interest in the sphere of digital currency. The Federal Reserve Bank of Boston announced in August that it is partnering with researchers from the Massachusetts Institute of Technology to build and test a hypothetical central bank digital currency. Despite this, Federal Reserve Chairman Jerome Powell said last week that the Fed did not "make a decision to issue one", adding that more work needs to be done, along with "extensive" public consultation with stakeholders.
Private companies are a little more optimistic about the prospect. PayPal announced last week that it would allow its US account holders to buy, sell and hold cryptocurrencies in their PayPal digital wallets in the coming weeks, and to use digital currencies to pay for purchases at the company's 26 million merchants in the company's payment network .
JPMorgan, too, took several steps this year to build - or spin off - its blockchain presence. He extended banking services this spring to cryptocurrency exchanges Coinbase and Gemini - three years after the bank's CEO, Jamie Dimon, called bitcoin "a fraud" and said he would fire "in a second" anyone at JPMorgan who were trading in digital currency.
In August, the bank sold Quorum, the blockchain platform it developed, to New York-based technology company ConsenSys. JPMorgan uses Quorum to power the unit now known as Liink, which debuted as a pilot program in 2017. The bank also used Quorum to test JPM Coin.
Venture capital funding for blockchain startups fell by more than 30% last year, CB Insights reported. But Farooq said the excitement about the platform's potential has not abated.
"If you think about blockchain, we are either somewhere in the trough of disillusionment or just beyond that on the [Gartner] hype curve," Farooq told CNBC. "That's why at JPMorgan we have been relatively quiet about it until we were ready to scale it and market it."