JPMorgan Files a Patent for Interbank Blockchain Payment Network

JPMorgan has filed a patent for a blockchain-based system for the reconciliation and facilitation of financial transactions between banks, according to a set of recently published filings.

“A unique system for recording transactions and storing data.”

The filing’s language was (perhaps deliberately) vague–no mention of the code that would be used to create the system was mentioned anywhere in the filing. The patent, which was initially filed in October of 2017, simply describes a -based system that would record interbank transactions on a peer-to-peer network.

The system will reportedly be “a unique system for recording transactions and storing data.”

In one of the most specific pieces of language used in the filing, the system was described:

“In one embodiment, a method for processing network payments using a distributed ledger may include: (1) a payment originator initiating a payment instruction to a payment beneficiary; (2) a payment originator bank posting and committing the payment instruction to a distributed ledger on a peer-to-peer network; (3) the payment beneficiary bank posting and committing the payment instruction to the distributed ledger on a peer-to-peer network; and (4) the payment originator bank validating and processing the payment through a payment originator bank internal system and debiting an originator account.”

Cheaper and Faster Transactions, Cross-Border Settlements

The patent made mention of the usual benefits associated with using blockchain in banking, including cheaper and faster cross-border settlements. The patent compared blockchain with present practices: “for a cross-border payment to be made from a payment organization to a payment beneficiary [at present], a number of messages must be sent between the banks and clearing houses involved in processing the transaction.”

“This often results in a slow transaction,” the filing continued, “as there may be delays in service due to correspondent banking, messaging networks, and clearing intermediaries in the payment flow.”

has recently been particularly active in its engagements with blockchain technology. The company was considering establishing “” blockchain network as its own legal entity earlier this year. Just yesterday, Finance Magnates that JPMorgan is working on developing a blockchain system for trading debts internally.

If successful, the system will expand from the company’s commercial bank to other “sub-banks”; the system could also act as a sort of test for a blockchain network that customers would interact with directly.

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