Billtrust - Working Capital Tracker - September 2023

JPM Coin Programmable Payments Goes Live With Siemens

J.P. Morgan Q2 Earnings

Onyx by J.P. Morgan has recently launched programmable payments through its blockchain-based digital currency, JPM Coin. This innovative solution allows users to program their transactions using an “If-This-Then-That” interface, providing greater control and flexibility over their accounts.

According to a press release, the programmability allows clients to place customized rules on their payments. For example, they can specify a range of rules for funding a bank account in a dynamic manner in case of shortfalls — or execute payments based on events like margin calls, delivery of goods or fulfilment of contractual obligations.

The introduction of programmable payments is a significant milestone in the evolution of digital currencies and tokenized money. It paves the way for real-time, automated and programmable treasury operations, revolutionizing the way transactions are conducted.

Naveen Mallela, head of Coin Systems at Onyx by J.P. Morgan said, “Programmability has been a key objective for digital currencies and tokenized money since the beginning. Our new offering makes payments programmable ushering in the era of dynamic and event driven infrastructure in the industry. This is an important milestone and foundational for real-time, automated and programmable treasury.”

Siemens AG, a multinational conglomerate, became one of the first companies to utilize this feature, successfully completing its initial payment on November 6. Dr. Peter Rathgeb, the group treasurer of Siemens AG, expressed enthusiasm for the advantages and features that J.P. Morgan’s programmable payments bring to fiat currencies. He highlighted the ability to leverage 24×7 blockchain-based bank accounts combined with programmability, which will enhance automation, optimize working capital utilization, and support data-driven digital business models.

Other prominent companies, including FedEx and Cargill, are expected to adopt the solution in the coming weeks. Rebeca Fujimura Wiadacz, staff director of Global Cash Management at FedEx Corporation, praised the collaboration with J.P. Morgan and the use of innovative technologies like blockchain. She mentioned that FedEx has recently gone live with Onyx and JPM Coin, demonstrating their commitment to leveraging cutting-edge solutions to fuel their future growth.

The launch of programmable payments by J.P. Morgan comes as major financial institutions, including HSBC, Euroclear, and Goldman Sachs, continue to explore and implement blockchain technology in mainstream finance. HSBC, for example, has introduced a platform that utilizes distributed ledger technology to expedite gold trading, simplifying the process and providing clients with an effortless way to track their gold ownership.

J.P. Morgan’s programmable payments system builds on the success of its previous initiatives involving blockchain technology. The bank has already demonstrated its commitment to innovation by operating HSBC Orion, a platform facilitating the issuance and storage of digital assets like digital bonds. Additionally, J.P. Morgan collaborated with ING in 2018 to complete a trade finance transaction using blockchain technology, further showcasing its dedication to exploring the potential of this technology.