- JPMorgan Chase has introduced a programmable payments system utilizing blockchain.
- The system allows companies to automate payments based on predefined conditions, eliminating the need for standing orders at specific times.
- Naveen Mallela suggested that the programmable payments system could be appealing to companies’ treasurers.
JPMorgan launched a programmable payments system using blockchain that would allow companies to make payments automatically.
According to Bloomberg, JPMorgan Chase and Co.’s new programmable system would give clients the opportunity to plug in conditions for funds to be moved to cover overdue payments and margin calls.
Before this new feature, reports showed that clients had to set standing orders for payments to take place at a particular point in time, while now they can program the payments to happen when certain conditions are met.
Naveen Mallela, head of Coin Systems at JPMorgan’s blockchain division, Onyx, shared that by using blockchain, transactions were already close to instantaneous. He added, “Now, the new function at JPM Coin frees them from the need to set standing orders for a particular time or amount, kicking in instead when the preprogrammed criteria are met.”
Mallela claimed that JPMorgan’s new feature would be the first instance of a traditional financial firm building programmable payments at scale while using existing commercial bank money.
Furthermore, Mallela shared that the new programmable system could appeal to companies’ treasurers in the current interest-rate environment, as he believed that it could potentially allow them to earn more income on deposits. Mallela said,
When we talk about digital currencies and tokenized deposits, the holy grail has always been the ability to program payments.
The system has been tested, as the German automation company Siemens AG reportedly used the system this week to configure its accounts to transfer money to fill potential shortfalls.A previous report claimed that JPMorgan is in the early stages of exploring a blockchain-based digital deposit token. Furthermore, the bank’s token, JPM Coin, has seen $1 billion worth of transactions on a daily basis.
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