A recent media report revealed that eighty banks in Japan had signed to the Interbank Information Network, a blockchain-powered platform created by JP Morgan. The aim of the platform is to counter money-laundering activities in Japan.
Thus far, 365 banks from all over the world have signed up to the network. The platform runs on Quorum, a variant of the Ethereum blockchain. It makes to shared information needed to verify payments much faster amongst participating banks.
According to media reports, banks in Japan are signing up to the project due to the unsatisfactory money laundering measures in the Japanese banking system. Daizaburo Sanai, who is an executive director at JP Morgan, said that Japanese banks could use the platform to boost AML enforcement. This is because the platform makes it more efficient and much faster to screen users of their systems. The IIN platform was created in 2018. It is already active in various places around the world. JP Morgan plans to go live in Japan in 2020 Q1.
Money Laundering is a Major Problem
Banks have been struggling to deal with terror financing and money laundering for years. In 2014, the FATF noted that Japan’s banking systems had serious problems when it came to tackling money laundering and financing of terror. One of the largest banks to have signed a letter of intent to join the platform is Sumitomo Mitsui Trust Bank Ltd. JP Morgan has been quite active in the blockchain space. For instance, it had been working with the Singaporean central bank to create a blockchain platform for use in cross-border payments.
Other Efforts in the Cross Border Payments Space
To boost the speed and efficiency of transaction processing, SWIFT has been working on its own systems. Facebook is also actively working to develop the Libra project. This project is aimed at making cross border payments more efficient and affordable, which will allow them to reach underserved communities throughout the world. However, this project has faced some opposition from lawmakers all over the world. They accuse Facebook of trying to upend the current global system of finance.