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J.P. Morgan Onyx brings remittances to Asian banks

The bank is creating blockchain use cases for correspondent banks – plus, what’s up with the space satellites?

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Christine Moy and Gayathri Vasudev, J.P. Morgan

J.P. Morgan has made a number of announcements this year related to its blockchain-related initiatives, from fund transfers to experiments using satellites in space.

DigFin spoke with two bank executives in an attempt to tie these into a vision of where the bank is headed on the back of the technology – including, most recently, tests involving Earth-orbiting satellites.

The bank has moved a variety of blockchain- and other next-gen tech projects into a business unit called Onyx.

DigFin asked if this is meant to be a standalone, profitable commercial entity; the answer was ambivalent, with the division’s backers seeing it as a platform of shared software to augment the wholesale-payments business, either internally or with clients.

“We’ve proven we can industrialize blockchain technology,” said Christine Moy, New York-based global head of Liink, one of the services operating under Onyx.

Liinking correspondent banks

Liink was first called the Interbank Information Network, and represents a peer-to-peer blockchain network developed by the bank starting in 2016. It now claims more than 400 financial institutions are registered on Liink, of which about 100 are actively using or testing it.

“It’s to solve problems in cross-border payments and the treasury space,” Moy said.

Liink by itself is just a network to move data: it needs applications to make it useful. It has developed two use cases. First is “Resolve”, a compliance tool that helps banks communicate in order to screen for sanctions on an entity trying to move money.



More recently, the bank has announced a number of counterparts in Taiwan and Indonesia using Liink for its second app, “Confirm”, which lets banks confirm whether a beneficiary of a payment is legitimate.

Gayathri Vasudev, head of global clearing product for wholesale payments, says Liink doesn’t operate in a vacuum, but in combination with other functions of the bank. In this case, Liink is being paired with PayDirect, a (non-blockchain) clearing product, to enable Confirm to operate for cross-border payments.

The example involving Taiwan and Indonesia is for remittances – which seems to put Onyx in competition with fintechs like Wise, Tranglo or NIUM’s InstaREM.

Asian remittances

“Cross-border payments can be expensive, slow, and opaque,” Vasudev said. “There are many Indonesians living in Taiwan who want to send money home, but it’s expensive for banks to do this. There are also a lot of payments that get returned due to errors. Integrating Confirm into our clearing services lets banks in Taiwan remove a lot of the complexity from cross-border payments.”

She adds that the first use case is remittances but the service could be used for corporate payments too. The benefit to counterparties is that banks may continue to use their own systems because they outsource the complexity of the cross-border translation to J.P. Morgan.

Bank Negara Indonesia (Persero) is now experimenting with Confirm on the receiving end, while in Taiwan a dozen banks are testing it, including CTBC Bank, Taiwan Cooperative Bank, First Commercial Bank, Shanghai Commercial & Savings Bank, Mega Bank, Taipei Star Bank, and Taiwan Shin Kong Bank.

“The vision is to enable clients to make any payment in any currency, anywhere in the world,” Vasudev said, although this will require building competitive advantage in currency corridors.

While remittances may put J.P. Morgan in competition with one set of fintechs, this fight for currency corridors also sounds like the sort of thing that Ripple and other blockchain-based players are trying to win.

Vasudev wouldn’t comment directly on competitors, but said, “Liink is not about moving money on the blockchain; we’re not changing the settlement mechanisms. We’re about connecting the ecosystem to improve flows between banks.”

Moy says the third application for Liink, still in the works, is likely to be to let clients access intra-day balances. “Clients can optimize payments on an intra-day or even a real-time basis,” she said.

Payments in space

Onyx is involved in several other projects other than Liink. These include JPM Coin, a token for moving value among deposit accounts within the bank’s blockchain ledger; a similar prototype for debt securities; and a prototype for Singapore’s Project Ubin, to create new rails for correspondent banking payments. It also developed Quorum, a blockchain protocol that it sold to ConsenSys.

But one of the more eye-catching announcements from Onyx came in February, when the bank announced it was testing transfer of value among satellites orbiting Earth.

Although the project is way ahead of any kind of commercialization, Moy says the bank is coming up with potential use cases for the space economy – a market that is coming into view as SpaceX, Blue Origin and other companies look to develop space tourism, and as the U.S., China and others build towards mining operations on the moon.

Satellites in low-earth orbit are constantly moving in relation to the ground, so the bank sees a use case in enabling a network of satellites to outsource work to whichever craft is in monitoring range of a piece of the planet.

The bank is contemplating a satellite-to-satellite marketplace. As the lower earth-orbit satellites shift orbit position and move out of range, they can outsource their tasks to other nearby satellites. “We tested the ability to transfer extra-terrestrial payments for services rendered,” Moy said.

“I don’t know when this becomes real,” Moy said, “but we’re deriving learnings from this research for earthbound digital payments,” by learning how to operate machine-to-machine value transference with limited hardware storage and in a low-bandwidth environment. 

The tech could one day transfer to serving digital payments to people on the planet in remote areas or places in climatic extremes, or using low-bandwidth mobiles. Another use case could be autonomous vehicles, connecting payments among cars.

While these ideas remain highly speculative, the Onyx team hopes they add up to services that help its banking counterparties in ways that are very down to earth.


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J.P. Morgan Onyx brings remittances to Asian banks