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Experts in financial services giant JPMorgan said blockchain technology would bring benefits to banks and payment systems, Bloomberg said on Jan. 29.
JPMorgan's Global Research Chair Joyce Chang said, "Blockchain will not reinvent the global payment system, but it will bring marginal improvements. The most significant impact is likely to occur in the next three to five years and will focus on trade finance.
According to a recent report led by Chang, finance-chain applications in trade-financing are more common because of the high potential of efficiency gains related to digitization. She would have noted that while cryptocurrencies have attracted the most attention, the underlying technology of a distributed ledger is more important.
Chang highlighted the Interbank Information Network (IIN), composed of 157 member banks at the international level. IPM was developed by JPMorgan on its Quorum platform, based on the Ethereum blockchain. The organization aims to meet the challenge of sharing information between banks and speed up transactions for recipients.
According to the report, Spanish banks such as BBVA and Santander have been particularly forward-thinking in the application of blockchain technology within their respective businesses. In December 2018, BBVA finalized a 150 million euro loan using blockchain technology with Porsche Holding. In April 2018, BBVA claimed to be the "first" global bank to conduct a full lending process using blockchain technology.
Both banks have joined the International Association of the European Union for Trusted Blockchain Applications (IATBA). BBVA and Santander were among the first five banks invited to join IATBA.
While blockchain is becoming increasingly popular for some financial services, Chang said technology faces four major challenges: scalability, integration, profitability, and regulation.
Earlier this month, a group of researchers from leading US universities announced the launch of a "globally scalable decentralized payment network." finances the development of a cryptocurrency called "Unit-e".
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