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article imageJPMorgan Chase files patent for blockchain-based payments

By Ken Hanly     May 5, 2018 in Technology
New York - The huge US-based financial institution, JPMorgan Chase is seeking a patent on a system that would used distributed ledgers, a blockchain system, to facilitate and reconcile financial transactions.
The patent
The patent application was published by the US Patent and Trademark Office on Thursday. The original application had been filed in October of 2017. The application notes:
[0003] Distributed ledgers, such as Blockchain, provide a unique system for recording transactions and storing data. In general, distributed ledgers hold a log of transactions (events) that may be replicated across a public or private distributed network. Cryptography and digital signatures may be used to determine valid parties and transactions such that all parties/observers agree on the order and state of the ledger in real-time without having to rely on a trusted third party to hold the true "golden copy." The distributed ledger thus provides a practically immutable, verifiably true audit trail.
JPMorgan Chase
Headquartered in New York City, JPMorgan Chase & Co, is a US-based multinational bank and financial services holding company. It is the largest bank in the US. It is also the second largest bank in the world by market capitalization. As of 2017-18 the company is one the largest asset management companies in the world with $2.789 trillion under management.
The hedge fund unit is the second largest hedge fund in the US. As of 2017, the company had 252,539 employees
JPMorgan Chase is one of the four American Big Banks the others being Bank of America, Wells Fargo, and Citigroup.
JPMorgan explains the patent
A company statement said: "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."
The blockchain would be an improvement on the existing system in that it would allow real-time settlement more cheaply and quickly than possible under the present system which often involves several messaging networks and clearing intermediaries before the payment can flow.
The bank had already launched an etherium-based platform, Quorum, prior to the patent application
Just a few days before filing the patent application the bank had already launched Quorum an ethereum-offshoot which is designed for the services that the patent outlines. Emma Loftus, head of global payments and foreign exchange for JP Morgan Treasury Services said: "Blockchain capabilities have allowed us to rethink how critical information can be sourced and exchanged between global banks."
The company announced the Quorum service in an article on October 16th last year.
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