There are country-by-country deployments, and then there are company-by-company deployments.
News this week that banking giant JP Morgan Chase is working with Siemens on payments-oriented blockchain offerings signals a way to get the technology – and more specifically, Onyx, JP Morgan’s blockchain unit – more firmly entrenched in the business landscape.
Read more: Siemens launches blockchain built by JPMorgan
For now, the system – developed with Siemens with Onyx – is only used to transfer money between Siemens’ own accounts in US dollars, although there are plans to add transfers in euros in 2022. The key is to help verify payments and make transactions more efficient. .
But the idea of setting up payment blockchains and gaining traction with large corporations shines a light on how multinational companies are looking at cryptocurrencies and how blockchain could be used in the cross-border exchange of more than bitcoins and stablecoins – and can indeed be used to transfer all kinds of digital assets (including information and contracts).
Find a wide berth
It is in cross-border efforts that blockchain can find its place in terms of financial services.
In a PYMNTS report produced in collaboration with Circle, surveys of 250 executives revealed that blockchain has great potential in international business.
See more : Bridging the gap between cross-border crypto demand and access to services
PYMNTS research found that, despite the availability of new payment options, many financial institutions (FIs) are lagging behind market interest in innovations in cross-border payments, especially in contexts B2B.
About 58% of multinational companies use crypto in at least some business processes, whether through investing or payment activities. PYMNTS found that 56% of cross-border businesses use at least one blockchain network. As the data shows, they mainly use public networks, with 37% using only public networks and 15% using both public and private networks.
There are implications for the use – and, for businesses and FIs, who seek to use – blockchain, given the inefficiencies already inherent in cross-border transactions. Correspondent banking as a process means that two banks have to establish reciprocal accounts with each other, from country to country. This can be an expensive and costly practice that is opaque at best and riddled with sore spots at worst.
Naveen Mallela, Global Head of Onyx Coin Systems, told Karen Webster: “My conversations with most banks have gone [concluded] that the industry needs shared platforms.
“These are not specific bank products; these are not bank specific platforms, ”he said. “These are industry-wide shared platforms and decentralized networks. “
Read more: JPMorgan’s Onyx opens infrastructure to disrupt cross-border payments
The focus on technology and platforms – and primarily on the blockchains that underpin everything – gives a launching pad for JP Morgan’s JPM Coin, but extends digital betting far beyond a coin or digital currency. Critical mass could be reached when multinationals take note, for example, of Siemens’ reach – and follow suit.