JPMorgan brings programmable payments to blockchain
Siemens is anchor client for a new rules-based approach to banking.
JPMorgan and Siemens have launched a first blockchain-based programmable payment. At its heart is the idea of conditionality: teaching a bank account to act for itself based on some clear parameters.
“If you look at bank accounts today, they have some programmable capabilities in the form of standing orders,” explains Naveen Mallela, global head of coin systems at Onyx by JPMorgan.
“You can set instructions for a direct-debit capability to run on particular days of the month, but that’s about it.”
Banking hasn’t advanced beyond that, in terms of rules-based systems, for decades.
“What we’re looking to do with programmable payments is create a more expressive rule set on what you can do with your bank account, to enable more conditionality,” Mallela adds.
Think of it in basic programmable terms: if X happens, then do Y. If this happens, then do that. It lends itself in particular to dynamic funding – the ability to specify a range of rules for funding a bank account in a dynamic manner in case of shortfalls – and event-based pay-outs.