JP Morgan Rep says JPM Coin Can Simplify the ‘Pain Point’ of KYC / AML
At an International Monetary Fund (IMF) panel discussion on April 10th 2019 titled “Payments in the Digital Age” in Washington, DC, JP Morgan Chase’s Sarah Youngwood discussed the new JPM Coin. She says the existing pain points of Know Your Customer (KYC) and Anti-Money Laundering (AML) processes can be streamlined through the JPM Coin.
How the JPM Coin Can Help with KYC / AML
In addition to Youngwood, panelists included Circle’s Jeremy Allaire, ECB’s Benoît Cœuré, and the Central Bank of Kenya’s Patrick Njoroge.
Youngwood described how JP Morgan is planning to compete with Venmo by leveraging “a consortium of banks” and secure, peer-to-peer payments where only known actors can participate. The latter however, continues to prove difficult.
According to Youngwood,
“[It’s] still a pain point, [namely] making sure that the good actor and only the good actors can transact, and so we obviously need to do that, and we support doing it…”
She also said JPM Coin’s distributed ledger could be used to simplify processes that banks are legally required to complete, such as KYC and AML:
“We absolutely need to have a more efficient way to have the information move. So again we went to technology and the distributed ledger is actually a great technology for that because we can put information on the ledger so we can clear that this is a good actor and this is a good transaction immediately instead of through phone calls and email, the old way [with] the correspondent banks…internationally.”
The Importance of On-Chain Data Explained
Youngwood also revealed that JPM Coin is being used to “scale solutions that are already working in hundreds of billions of dollars”.
She says data used to validate customer identity and eligibility is securely stored through JPM’s ledger, where actor and transaction validity see less problems through on-chain storage.
Besides identity, off-chain information in general has been identified as a leading obstacle for the successful implementation of security tokens by industry thought leader Jesus Rodriguez.
In addition to JP Morgan, financial powerhouses such as Fidelity and NASDAQ have also entered the digital asset realm. Many speculate the emergence of security tokens— which feature clear regulatory requirements— will bridge the gap between traditional finance and Distributed Ledger Technology (DLT).
When asked if JP Morgan has concerns over growing competition, Youngwood suggested her bank isn’t phased:
“[We] welcome competition as long as the activities of the competitors gets regulated and as long as it is solving customer issues…”
What do you think about Youngwood’s comments about the JPM Coin? Will it go on to solve the ‘pain points’ of KYC/AML verification? We want to know what you think in the comments section below.
Image courtesy of JP Morgan.