Blockchain for Banking News

Siemens taps JP Morgan’s Onyx for blockchain-based payments

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According to a Financial Times report, JP Morgan’s Onyx blockchain unit is working with Siemens for blockchain-based automated payments.

For Siemens, the motivation isn’t to address current payment levels but to cope with pay per use and digital business models coming on stream. These less predictable cash flows mean the company needs to move money around between internal Siemens accounts, ideally in an automated fashion, which is where Onyx comes in. 

Last year JP Morgan went into production with its JPM Coin system, enabling 24/7 cash movements within the JP Morgan network. JPM Coin is not a stablecoin, just a tokenized representation of bank account money, making it programmable.

Most banks allow for some level of automation, but the programmable money nature of blockchain adds more options. “You want more flexible rules or flexible triggers. That is where the current infrastructure falls short,” said Navin Mallela, who heads Coin Systems at Onyx. The solution will initially be for dollars, with euros to follow.

Meanwhile, JP Morgan is ramping up its blockchain efforts. In Singapore, it has a joint venture, Partior, with DBS Bank and Temasek for a mulit-currency interbank payment system based on blockchain.

To stay ahead of the curve, the bank is also involved in central bank digital currency (CBDC) trials, not just as a participant bank but as a technology provider. In July, a cross border trial between the Banque de France and the Monetary Authority of Singapore used Onyx technology. The bank worked with Oliver Wyman on a report that estimates that $100 billion could be saved on corporate payment costs by using a cross border multi-CBDC network globally.

JPM Coin is also used in other Onyx offerings, such as for settlement on JP Morgan’s Repo blockchain network launched last year.a

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