Japan is looking to JPMorgan Chase & Co.’s blockchain-based information network for payments, Bloomberg reported on Monday (Dec. 9).
A country long blamed for weak measures against money laundering, Japan has over 80 banks interested in joining the Interbank Information Network (IIN), said executive Daizaburo Sanai.
Japanese banks could be looking to make use of the platform to enhance anti-money laundering (AML) measures because cash recipients can be screened “faster and more efficient,” Sanai said in an interview with Bloomberg.
Among the several initiatives being developed, IIN uses digital technology to accelerate international money transfers. JPMorgan launched IIN as a 2017 pilot and plans to go live in Japan as soon as January, Sanai said.
Japanese banks have been asked to bolster efforts to thwart money laundering since the Financial Action Task Force found deficiencies in 2014. The organization, established in 1989, completed Japan’s on-site inspection in November and plans to announce the result next year, a finance ministry official said.
Takashi Endo, a treasury operations department officer at Tokyo-based Sumitomo Mitsui Trust Bank, said that minimizing inquiry delays between banks could enable “quick collaboration with law enforcement authorities, which is an effective way” to fight money laundering.
JPMorgan Chase said earlier this year that it was planning to expand its use of blockchain technology to improve the banking industry’s payment system, as well as get FinTechs to experiment on developing the platform.
Last year, more than 75 of the world’s biggest banks became members of the IIN to fight off threats from payment startups. And more than 220 banks have signed up for the original service, which enables data sharing on payments over the network.
“The initial use case was around sanctions screening,” JPMorgan’s head of global clearing, John Hunter told The Financial Times at the time. “Now we’re looking at the ability to do more at the point of settlement.”