US banking giant JP Morgan has introduced a new automated payment feature to its blockchain-based digital currency platform, JPM Coin, that allows its institutional clients to pre-program their transactions, giving them greater control and flexibility over their bank accounts.
Details of the new functionality were shared on LinkedIn by Naveen Mallela, head of JP Morgan’s blockchain platform Onyx. Mallela said the new feature is now available to all its institutional customers who have an account on the JPM Coin System.
JPM Token Holders Can Automate Payments for Margin Calls and Delivery of Goods
According to a press release by the bank, the new feature paves the way for real-time, automated, and programmable treasury functionality and new digital business models. Mallela hailed its launch as a significant milestone in the evolution of JPM Coin and digital currencies, even describing the programmability as the “holy grail” for its blockchain platform.
The feature allows customers on the JPM Coin System to preset the rules on their payments for a seamless transaction experience. For instance, they can specify a set of dynamic rules for funding bank accounts by keeping shortfalls in mind, or execute payments based on events such as margin calls, delivery of goods, or fulfillment of contractual obligations.
This is particularly useful for institutions that manage treasury operations during non-working days, as JPM Coin functions 24/7 throughout the year.
JPM Coin, which is the native token of the Onyx blockchain – an Ethereum-based network, has facilitated real-time money transfers between JP Morgan accounts worldwide since 2019. The bank says its blockchain can handle an estimated $1 billion in daily transactions.
The Onyx team shared that its programmable payments feature has been the goal of the payments industry for several years, touting the offering as a “first-of-its-kind” by a global commercial bank. JPM Coin users can now program their payments using what the bank calls its “If-This-Then-That” interface.
German Multinational Siemens Becomes First Client to Use the JPM Coin Automated Payment Feature
On November 6, German multinational conglomerate Siemens AG became JP Morgan’s first institutional client to utilize the feature. The company’s group treasurer Dr. Peter Rathgeb expressed his enthusiasm for the benefits JPM Coin’s programmable payments system will bring to a fiat-based economy. He also highlighted the ability of blockchain-based bank accounts, which are available all day, all year, to enhance automation, optimize working capital utilization, and support data-driven digital business models.
Meanwhile, other prominent firms like international courier service FedEx and global food corporation Cargill are also expected to adopt the solution before the end of 2023.
JPMorgan Efforts to Bring Blockchain Technology to Traditional Finance
The bank’s commitment to bringing traditional banking onto the blockchain goes beyond the JPM Coin.
Recently, JPMorgan aided some of its biggest clients – Goldman Sachs and BNP Paribas – in processing tokenized US Treasuries and dollars on Onyx. In October, BlackRock, the world’s largest investment manager, tokenized money market fund shares on the blockchain, which were later used by Barclays Bank as collateral in an over-the-counter derivative contract.
JPMorgan’s Onyx is also said to be working on a new blockchain-based cross-border transaction platform. As per a report published in September, the deposit solution powered by a digital token will be a separate offering from the megabank’s JPM Coin system and is subject to approval from financial regulators in the United States.
Additionally, the bank also operates HSBC Orion, a blockchain-based platform of British banking giant HSBC, that facilitates the issuance and storage of digital assets like digital bonds. In 2018, JPMorgan partnered with ING to complete a trade finance transaction on the blockchain.