JPMorgan Employs Blockchain for 24/7 Dollar Transfers with Indian Banks

JPMorgan, the global financial services company, is actively exploring the advantages of blockchain technology as it seeks to overcome the limitations of traditional finance.

In a significant collaboration, JPMorgan has joined forces with six major Indian banks, including HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and its own banking unit at Gujarat International Finance Tec-City (GIFT City). Their goal is to establish a blockchain-based platform that enables interbank settlement of U.S. dollar transactions, as reported by Bloomberg on June 5.

The primary objective of this blockchain project is to enhance the capacity of the current settlement system, as highlighted by JPMorgan’s senior country officer, Kaustubh Kulkarni. He emphasized that the platform will enable the participating banks to process instant transactions 24/7, eliminating the previous delays of several hours experienced under the existing interbank settlement system. Moreover, the platform will operate on all days, including Saturdays, Sundays, and public holidays, thus removing the restrictions on settlement timing.

Kulkarni asserted that by leveraging blockchain technology to facilitate transactions on a 24×7 basis, processing is instantaneous and enables GIFT City banks to support their own time-zone and operating hours. Additionally, the initiative aims to position New Delhi’s GIFT City as a viable alternative trading center to Singapore and Dubai, further bolstering its significance in the global financial landscape.

JPMorgan to Run Pilot in 2023

Kulkarni announced that JPMorgan will conduct a pilot project over the next few months to assess the banks’ experience. After obtaining approval from the International Financial Services Center Authority, the pilot project will be launched on Monday, utilizing JPMorgan’s blockchain platform, Onyx.

In 2020, JPMorgan introduced its blockchain-based platform, Onyx, with the objective of enhancing the quality of wholesale payment transactions. As of April 2023, the bank reportedly processed nearly $700 billion in short-term loan transactions through Onyx.

This news coincides with JPMorgan currency strategists who highlight signs of emerging de-dollarization. The strategists point out that the decline of the dollar’s share in foreign exchange reserves has reached a record, while its share in exports shows emerging signs of de-dollarization in commodities.