February 21, 2024

J.P. Morgan uses blockchain to process loans from car dealers

J.P. Morgan uses blockchain to process loans from car dealers

According to a document filed by J.P. Morgan's auto finance unit, the bank is interested indevelopment of a distributed registry for lending. Thus, the organization will be able to provide car dealers with a revolving line of credit secured by inventory items.

JPMorgan launched a pilot project of the system onbased on Ethereum, which is already being tested in various car dealerships. The system uses a unique vehicle identification number assigned to every vehicle in the United States as a way to verify cars at dealerships. The bank hopes its blockchain-based system will prevent a practice known as "double covering."

According to a Coindesk article, Christina Moi, head of blockchain at JPMorgan, said:

This works when, by accident (or design), a dealership may post one vehicle as collateral with two banks at the same time.