JPMorgan Chase intends to patent a system in which a distributed ledger will be used to implement and reconcile financial transactions, CoinDesk reports.
In an application published by the US Patent and Trademark Office, JPMorgan describes a system that uses distributed ledger to record information about payments exchanged between banks via a peer-to-peer network. According to the bank, the technology will create a "unique system for recording transactions and storing data.
In one embodiment, a method for processing network payments using a distributed ledger may include: (1) a payment originator initiating a payment instruction to a payment beneficiary; (2) a payment originator bank posting and committing the payment instruction to a distributed ledger on a peer-to-peer network; (3) the payment beneficiary bank posting and committing the payment instruction to the distributed ledger on a peer-to-peer network; and (4) the payment originator bank validating and processing the payment through a payment originator bank internal system and debiting an originator account. For a cross-border payment to be made from a payment organization to a payment beneficiary, a number of messages must be sent between the banks and clearing houses involved in processing the transaction. This often results in a slow transaction, as there are may be delays in service due to correspondent banking, messaging networks, and clearing intermediaries in the payment flow.
Blockchain is able to improve existing systems by providing cheaper and faster calculations for real-time transactions, the bank said.