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The State Bank of India (SBI) has joined hands with JP Morgan in a deal that will see it use the US bank’s blockchain-powered payment network, Liink. A report unveiled this news on February 23, citing sources familiar with the matter. Reportedly, this collaboration will help SBI’s customers execute transactions rapidly and at reduced costs.
According to the report, SBI’s clients currently have to wait up to two weeks to complete cross-border transactions. However, with this partnership, Liink will reduce the time taken to resolve a cross-border transaction to a few hours. In so doing, the network will help cross-border payments reach their beneficiaries swiftly and with few steps as compared to the current setup.
Eyeing global expansion
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According to a JP Morgan spokesperson, this partnership is part of the bank’s broader goal of exposing Liink to widespread adoption. At the moment, the blockchain-based network, which users can leverage to make secure as well as peer-to-peer data transfers with greater speed and control, has more than 100 international banks. Reportedly, the bank is also holding discussions with other leading government and private lenders to let them onboard Liink.
To increase overall customer satisfaction, JP Morgan upgraded the Liink network such that banks will be able to pre-validate accounts before making payments. Additionally, they can check message formatting to ensure compliance with the regulations on beneficiary jurisdictions. In so doing, the network helps minimize transaction rejection and fraud.
This news comes as more banks across the globe continue shifting to blockchain-based remittance systems. Pointing out the force behind this revolution, Nitin Sharma, partner at Antler Global and previously the founder of Incrypt Blockchain said,
The World Bank confirmed that bank-led remittances cost an average of 10% globally, which is really high. Projects like Ripple or various bank consortia have argued that a distributed ledger (or a new blockchain) shared between banks directly removes the need for correspondent banking and can thus reinvent cross-border remittances or trade cash flows for the new age.