A top executive of JPMorgan Chase has revealed that more than 80 banks in Japan have indicated interest in joining JPMorgan’s blockchain payment network for faster payment services and curbing money laundering in the country.
According to a Business Times Singapore report today, Daizaburo Sanai, Executive Director at JPMorgan, stated that the development could be regarded as the highest number of interest the network has gotten from a single country since its inception.
Sanai believes that the use of blockchain to process payments faster and screen cash recipients to identify fraudulent transactions could be the reason why the banks are looking toward joining the JPMorgan’s Interbank Information Network (IIN).
He further noted that the IIN network eliminates money laundering by requiring other financial institutions on the network to confirm transactions before it becomes successful.
Business Times Singapore noted that the banks are desperate to find a lasting solution to the persistent money laundering issue that has ravaged the nation’s financial system.
In 2014, the Financial Action Task Force (FATF) had tasked financial institutions in Japan to mitigate the rate of money laundering in the country as low-level security measures were discovered in its financial system.
Takashi Endo, a treasury operations department officer at Sumitomo, one of the banks which signed a letter of intent to join the IIN blockchain, stated that the use of blockchain in the traditional banking system could eliminate the downtime experienced in waiting for confirmation between banks during cross-border settlements.
“[This] could enable quick collaboration with law enforcement authorities, which is an effective way to fight money laundering,” he added.
Launched in 2017, the JPMorgan IIN network has been adopted by several financial institutions globally, with the report suggesting that the service will be rolled out fully in Japan by January next year.
As reported in September, Southeast Asia’s second-largest bank by assets, Oversea-Chinese Banking Corporation (OCBC), joined JPMorgan’s IIN network, to boost its cross-border settlement transactions.
