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- JPMorgan introduced a new programmable payments feature for its JPM Coin, allowing clients to automate fund movements.
- Siemens became the first JPMorgan client to test the programmable payments feature, emphasizing the potential for enhanced automation.
Last week, banking giant JPMorgan added a high-profile functionality to its blockchain system while introducing a new programmable payments feature. this feature will allow JPMorgan clients and companies to shift cash automatically.
JPMorgan Chase & Co’s JPM Coin has introduced a feature allowing clients to automate account actions based on specified conditions. This functionality enables clients to seamlessly allocate funds for covering overdue payments and margin calls, with potential future applications for capitalizing on exchange rate differentials.
Leveraging blockchain technology, these transfers occur almost instantly, breaking away from traditional banking’s batch processing limitations during working hours. The novel aspect of JPM Coin’s latest function liberates clients from the constraints of setting fixed schedules or amounts, triggering actions when predefined criteria are met. Naveen Mallela, head of Coin Systems at JPMorgan’s blockchain division Onyx, said:
If you think of the current bank account provided by any financial institution, there is only so much you can do in terms of configurability and set of rules. That is what we are changing. We believe this is the first instance of a traditional financial firm building programmable payments at scale, using existing commercial bank money.
Siemens Becomes the First JPMorgan Client
Interestingly, IOTA partner Siemens was quick to join onboard and test JPMorgan’s programmable payments feature for its personal use. Speaking on this, Dr. Peter Rathgeb, Group Treasurer of Siemens AG said:
This will take Siemens to the next level of automation to not only optimize the use of working capital but also enable data-driven digital business models and support the scalability of our Siemens business from the treasury side.
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JPMorgan has successfully implemented blockchain technology for its initial collateral settlement and expanded its JPM Coin capabilities by enabling euro transactions. While mainstream blockchain use is still relatively restricted, JPM Coin facilitates daily transfers equivalent to $1 billion, a fraction compared to JPMorgan’s overall USD transaction volume of $10 trillion.
Mallela suggests that the feature allowing automatic fund movements based on predefined conditions could particularly attract corporate treasurers seeking to optimize income on deposits amid the current interest-rate landscape.
“When rates are close to zero, treasurers are less bothered, but when rates are 5.5% or rising, that is when all these capabilities start becoming more attractive,” Mallela said. “When we talk about digital currencies and tokenized deposits, the holy grail has always been the ability to program payments.”
Joining Siemens would be companies like FedEx and Cargill who are planning to use the system in the coming weeks.
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