LONDON (Reuters) – Stuck in space with bills to pay? Don’t worry, satellites could take care of that.
JPMorgan Chase & Co recently tested blockchain payments between satellites orbiting the country, bank executives told Reuters, showing that digital devices could use the technology behind virtual currencies for transactions.
The so-called Internet of Things (IoT), where devices connect to each other, is mostly connected to consumer electronics, including smart speakers like Amazon Echo and Google Home, and banks want to be ready to process payments when these smart devices start doing transactions autonomously. Umar Farooq, CEO of JPMorgan’s blockchain Onyx, felt the space was a cool place to try.
“The idea was to investigate IoT payments in a completely decentralized way,” Farooq said. “Nowhere is it more decentralized and more separate from earth than space.”
“Secondly, we’re nerdy and it was a much more fun way to test IoT,” he said.
To launch the space experiment, the bank’s blockchain team did not send its own satellites into space, but collaborated with the Danish company GOMspace, which allows third parties to run software on their satellites.
Farooq said a satellite test showed that blockchain networks can power transactions between everyday objects.
The test also showed that it might be possible to create a market where satellites send data to each other in exchange for payments, as more private companies launch their devices into space, said Tyrone Lobban, head of blockchain launch at Onyx.
Back to earth, examples of IoT payments that could sooner become a reality include a smart refrigerator ordering and paying for milk on an e-commerce site or a self-driving car that pays for fuel, Farooq said.
Blockchain, which first appeared as software that supports cryptocurrencies, is a common digital transaction book. Financial companies have invested millions of dollars to find the use of the technology in hopes that it can reduce costs and simplify more complex IT processes, such as securities settlement or international payments.
But so far blockchain has not yet had a widespread impact on financial services.
JPMorgan is one of the most active banks in the blockchain, announcing that in 2016 it created its own distributed registry called Quorum, which was sold to the blockchain company Consensys last year. The bank also developed a digital coin called JPM Coin and in 2020 created Onyx.
Onyx has more than 100 employees, and its blockchain applications are close to generating revenue for the bank, it said.
Among the department’s applications are Liink, a payment information network that includes more than 400 banks, a paper check exchange project and IoT experiments, Farooq said.
Reporting by Anna Irrera. Edited by Jane Merriman