JPMorgan sets up blockchain payments system for Siemens
JPMorgan has built a blockchain payments system for Siemens to handle the growing number of payments that the company has had to handle over the last few years.
Siemens expects the transactions volumes to continue to grow strong growth in the coming months as pay-per-use begins to gain popularity and hence the system needs to be able to handle thousands of transactions per day transparently and reliably. This is the first of its kind system to be deployed by a large company and it could set the tone for more such payments systems to be set up using blockchain in the future. This also opens the gates for mainstream usage of blockchain not only in the payments industry but allied financial services industries as well.
“If the business would stay the same as it is today, I would say we are fine regarding our treasury set-up. We can automate a bit and maybe we reduce costs and cash allocation,” Heiko Nix, head of cash management and payments at the German industrial firm, said. “This is not the reason why we are doing this. The reason is that we are seeing a huge change due to the emerging digital business models, because we will no longer be able to forecast cash, for example.”
The digitisation of financial payments, which is happening all around the globe in a fast and furious manner, has led to financial entities looking for infrastructure and systems that would support them in their efforts. Blockchain provides one a=such alternative for them and hence we are likely to see an upsurge in its use. For now, Siemens is using the blockchain system of JPMorgan, called Onyx to move funds internally within the Siemens units and it is restricted to dollars for now. It is expected that they would be adding euros to the mix in the near future.
The need would also arise shortly for banks to build systems and platforms that they would need to share and in this situation also, blockchains would turn out to be very useful and secure as the banks would need to share various data and information about users and funds to better secure their systems and make them more robust.