In a move that is supposed to slash the cost of global payments and improve service delivery, Germany’s largest lender, Deutsche Bank, is joining the JP Morgan-led blockchain project, Interbank Information Network (IIN), according to a report by the Financial Times on Sept. 15, 2019.
IIN is the largest financial services industry’s blockchain-based project, spearheaded by a global bank. With the inclusion of Deutsche Bank, there are now more than 300 banks that are ready to share payment-related information over the distributed ledger technology (DLT) system.
Most clients connected to IIN are smaller banks that process USD-denominated payments via JP Morgan, who acts as a correspondent. Therefore, the inclusion of Deutsche Bank, which is the world’s largest clearer of Euro-denominated payments, is a huge boost to the initiative.
Takis Georgakopoulos, Head of Payments at JPMorgan, said the participation of Deutsche Bank will help “drive towards ubiquity, and ubiquity is a pre-requisite for the success of the network.” The objective of IIN is to onboard 400 banks by the end of the year, with the German lender being the latest.
Takis Georgakopoulos added that:
“A network that only has JPMorgan’s clients will have very big natural limitations. It would mean that all of these other smaller banks would still need to have bifurcated procedures. What they do with JPMorgan and what they do with other banks would still have to be different.”
The blockchain project is based on the Quorum platform, a permissioned network based on Ethereum.
Ole Matthiessen, the head of the cash management division at Deutsche Bank also commented on the move:
“Our competitors are not just the other banks, it’s also new players on the market, we need to become efficient enough to provide seamless real time and digital process. Joining is definitely directionally a very important step for us because it will help drive [customer] satisfaction.”