Charles H. Miller
You may have heard us (or someone else) talking about J.P. Morgan’s Quorum, the Ethereum-based blockchain network designed to toe the line between private and public in the realm of shuffling derivatives and payments. It aims to satisfy regulators who need seamless access to financial goings-on, while at the same time protecting the privacy of parties that don’t wish to reveal their identities nor the details of their transactions to the general public.
Well, Quorum has been recently updated with new capabilities…
Interbank Payments Platform
First, JP Morgan announced the Interbank Information Network (IIN) that will be built on Quorum with the participation of two other banks – Australia-based ANZ and the Royal Bank of Canada (Australia). Additional institutions are expected to join the initiative in the coming months, with a focus on the correspondent banking market.
“IIN will enhance the client experience, decreasing the amount of time — from weeks to hours — and costs associated with resolving payment delays,” Emma Loftus, head of global payments and foreign exchange for JPMorgan Treasury Services, said in a statement. “Blockchain capabilities have allowed us to rethink how critical information can be sourced and exchanged between global banks.”
The bank’s treasury services clear trillions of dollars in transactions per day, so this is a notable application for them.
Zcash privacy technology included
The second thing JP Morgan added to Quorum is the privacy technology used by the Zcash network and cryptocurrency. Specifically, the firm behind Zcash helped JP Morgan integrate its zero-knowledge security layer (ZSL) into the enterprise blockchain.
Derived from Zcash’s zk-snarks technology, the code obscures all identifiable information about a transaction — including the user’s public key and the amount transacted — while still being able to provide accountants with the ability to audit those transactions.
“What we have now done through our partnership with JPMorgan is use zcash technology previously pioneered in the open zcash cryptocurrency to create protected and auditable transfer of token ownership on the JPMorgan blockchain,” Zcash co-founder Zooko Wilcox told CoinDesk.
The integration doesn’t include the so called “god key” that would give some trusted authority the ability to go in and make changes after the fact. Rather, Quorum’s private smart contract language, called Constellation, requires financial product creators to provide the public key to all relevant regulators, giving them the necessary access to ensure compliance.
If this integration proves successful — and JP Morgan customers start using it — we may see an entirely new ecosystem of financial products developed without the need of a central authority, such as the Depository Trust & Clearing Corporation.
In addition, JPMorgan and the Zcash Company are also looking forward to continue working together with other enterprises building blockchain technology, helping bring ZSL to new markets.
JP Morgan keeps investing in blockchain
Even though the bank’s CEO doesn’t like Bitcoin, the institution he runs is bullish about the blockchain technology. The two updates to the Quorum platform are the latest proofs of those intentions; the bank is also taking an active role in initiatives like the Hyperledger Project and the Enterprise Ethereum Alliance, so we expect to hear more from them in the month to come…
