JPMorgan Chase & Co says its blockchain-based information network for payments is drawing the greatest interest in Japan, a nation long blamed for weak measures against money laundering.
More than 80 Japanese banks have expressed a willingness to join the Interbank Information Network (IIN), JPMorgan Chase executive director Daizaburo Sanai said.
That is the most from any single nation among the more than 360 lenders on the network worldwide.
Japanese banks might be seeking to use the platform to bolster measures against money laundering because it makes the screening of cash recipients “faster and more efficient,” Sanai said in an interview.
IIN is among several initiatives being developed using digital technology to speed up global money transfers.
Other companies, including Facebook Inc, are working on blockchain-based payments projects and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has developed a new system to accelerate transaction processing.
JPMorgan Chase, which launched IIN as a pilot in 2017, has begun implementing it outside of Japan and plans to go live in that nation as soon as next month, Sanai said.
Under the platform, when a payment is flagged for confirmation, several parties can request and share information simultaneously, the US bank’s Web site says.
NOT COMPLIANT
Japanese banks have been under pressure to strengthen steps to prevent money laundering and terrorism financing since the Financial Action Task Force found deficiencies in the nation in 2014.
The Paris-based organization finished its latest on-site inspection of Japan last month and plans to announce the results next year, a Japanese Ministry of Finance official said.
Minimizing delays caused by inquiries between banks could enable “quick collaboration with law-enforcement authorities, which is an effective way” to fight money laundering, Sumitomo Mitsui Trust Bank Ltd treasury operations department officer Takashi Endo said.
The Tokyo-based bank is among the lenders that have signed a letter of intent to join the platform.
OTHER OPTIONS
SWIFT, the global banking cooperative, has developed a Global Payments Initiative, which uses existing standards to enable cross-border payments in a faster and easier-to-track way than its traditional messaging system.
Facebook is working on its own digital currency for cross-border payments called Libra, while JPMorgan Chase has created JPM Coin.
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