JP Morgan has helped central banks in Canada and Singapore to make their first trial run for cross-border payment solution on Blockchain. Central banks of Canada and Singapore has claimed that they have successfully completed the trial run for their DLT based payment system.
The cross-border payment project between two central banks has been named as the “Project Jasper-Ubin.” The technology used for the payment solution was provided by the consulting firm Accenture and American bank JP Morgan. However, the announcement did not mention what amount of money was transferred in the system.
Both the central banks have been experimenting with their own proprietary digital coins and distributed ledgers and linked up their respective networks using a technology called “hashed time-locked contracts,”
How Does Hashed Time Locked Contracts Works?
The company announcement mentions that the hashed time locked contracts ensure that all transactions on the network execute at the right time and in the right order. This would help the banks clear out payments more spontaneously at a cheaper price as it does not require the involvement of third parties in the system.
The central bank of Canada’s project Jasper and The Monetary Authority of Singapore’s Project Ubin are run on the implementation of Corda and Quorum privately.
The current surge of central banks looking for blockchain based cross border solutions is quite ironic, given they always claimed Bitcoin to be Ponzi schemes, but now rushing to use the underlying technology of Distributed Ledger. However, even in the case of current adoption by central banks, the technology they are using is surely DLT based, but it is centralized, private, and obscured from public view like JP Morgan’s JPMcoin.
The use of Distributed Ledger Technology by central banks to help them scale their cross border payment systems and make them much faster than the traditional ones is quite in trend. However, the execution of the same is not the same as the cryptocurrency space.