Money laundering battle fosters Japanese Banks to JPMorgan's blockchain payments network
By Congecko News 12/11/19 4:25 AM
On Dec 9, Daizaburo Sanai, an executive director at JPMorgan said having more than 80 banks in Japan have shown interest in joining JPMorgan Chase & Co.'s blockchain-based payments platform, the Interbank Information Network (IIN).
According to Sanai, the number is highest from any single country on the network, which currently has about 360 banks over the world.
Japan banks could be looking to make use of the platform to enhance anti-money laundering (AML) measures because it helps the screening of cash recipients "faster and more efficient", he said.
INN, among several initiatives being developed, uses digital technology to speed up international money transfers. Some companies as Facebook are working on blockchain-based payments projects and incumbent Swift has grown a new system to open the throttle transaction processing.
Sanai also shared that JPMorgan launched IIN as a pilot in 2017 and started to implement it outside of Japan, which plans to go live in the country as soon as January. Under the platform, once payment is flagged for confirmation, several parties can request and share information concurrently, the U.S. bank's website reported.
As from 2014 – when the Financial Action Task Force (FATF) found deficiencies in Japan, banks of the country have been under pressure to promote efforts to thwart money laundering. Last month, the organization that established in 1989 announced that it completed its latest on-site inspection of Japan and will announce the results next year.
Moreover, per the report, Tokyo-based Sumitomo Mitsui Trust Bank is one of the banks which have signed a letter of intent to take part in IIN. Takashi Endo, a member of the treasury operations division at the bank, said IIN could help minimize delays caused by interbank requests, and so enable "quick cooperation" with law enforcement authorities. It is said to be an "effective way" to prevent money laundering.
On the other hand, in 2018, having over 75 of the world's biggest banks became members of the IIN to fight off threats from payment startups. Additionally, more than 220 banks have signed up for the original service, which allows data sharing on payments over the network.
Some of the remarkable banks on the network include Deutsche Bank, Royal Bank of Canada and Australia and New Zealand (ANZ) Banking Group.
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