To make international payments easier, two of the largest names in conventional banking, JPMorgan and Visa, will connect their own private blockchains.
The SWIFT financial messaging system is now used to conduct international transactions between correspondent banks that operate in several time zones and use different currencies. But JPMorgan has announced that it is launching a rival product, Confirm, which will serve to confirm the authenticity of transacting parties for its cross-border payment blockchain, Liink.
Liink, formerly known as the Interbank Information Network, is a blockchain and payments infrastructure service provided by JPMorgan’s Onyx. JPMorgan estimates that account information mistakes cause 66% of payment failures each year, costing the global economy up to $118 billion.
Confirm, which is anticipated to help, will also combat fraud by verifying that the intended receivers are the owners of the accounts to which money is being sent. Confirm will be able to verify over two billion accounts across 3,500 financial institutions at its height, according to Onyx.
Deutsche Bank Joins as a Founding Member to Support Growth
Global payments leader Visa stated that its B2B Connect blockchain, which is tailored for financial institutions and its business customers, will use Confirm to approve account information.
In the meanwhile, Deutsche Bank in Germany announced that it has joined Confirm as a founding member to support its strategic growth. According to Alex Littleton, the worldwide head of Confirm, “Network effects have a significant impact on Confirm’s development.” “We will expedite our acceptance on a worldwide scale by naming Deutsche Bank as a founding member and enabling interconnectivity to Visa B2B’s blockchain.”
Investment and Financial Company Morgan Stanley Says Crypto Ecosystem is Becoming Less Decentralized
According to a study report released on Wednesday by Morgan Stanley (MS), the decentralization of the crypto ecosystem is decreasing. The paper said that while the underlying blockchains may be decentralized, it may become risky to operate a significant portion of the blockchain on a single or limited number of cloud providers as crypto legislation evolves.
According to the survey, half of the cloud-hosted Ethereum nodes utilize Amazon Web Services (AWS). This might become an issue if certain service providers choose to ban specific users or crypto goods or if there are protracted server failures.
According to Morgan Stanley, as the crypto ecosystem has developed, “various apps, code, services, and enterprises feeding into the core decentralized blockchains” have led to certain ecosystem components becoming less decentralized and more reliant on specific services.
Although it does present additional difficulties, the bank claims that this is not unexpected since “centralization is a natural progression of the financialization of bitcoin markets.”
Transactions are now validated by validators since the Ethereum blockchain switched to proof-of-stake (PoS) last month, a change known as the Merge. According to the research, 60% of these validators are operated by only four organizations. The Ethereum community is working on possible remedies and is aware of the centralization problem.