Global financial services company JPMorgan continues to explore the benefits of blockchain technology, implementing it to remove some restrictions on traditional finance.
The banking giant has partnered with six major Indian banks to introduce a blockchain-based platform that enables interbank settlement of US dollar transactions, according to reported Bloomberg on June 5.
Participating banks include HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank and JPMorgan’s own banking unit in Gujarat International Finance Tec-City, or GIFT City.
The blockchain project aims to expand the capacity of the current settlement system, according to Kaustubh Kulkarni, a senior manager at JPMorgan. According to the executive, the platform will allow banks to process instant transactions 24 hours a day, seven days a week.
With the current interbank settlement system, operations can take up to several hours. Also, clearance is not available on Saturdays, Sundays or holidays. JPMorgan’s blockchain pilot project will remove this hurdle, Kulkarni stated:
“By leveraging blockchain technology to facilitate transactions seamlessly, processing is instant and allows GIFT City banks to support their own time zone and hours of operation.”
The initiative is also intended to help New Delhi position GIFT City as an alternative shopping center to Singapore and Dubai, the report said.
According to Kulkarni, JPMorgan will carry out a pilot project in the coming months to analyze the experience of the banks. The pilot project will go live on Monday, using JPMorgan’s Onyx blockchain platform, following approval from the International Center for Financial Services Authority.
As we told you before, JPMorgan launched its blockchain-based Onyx platform in 2020, with the goal of improving the quality of wholesale payment transactions. The bank would have indicted nearly $700 billion in short-term loan transactions through Onyx through April 2023.
The news comes at a time when JPMorgan currency strategists are pointing to some signs of emerging de-dollarization. “De-dollarization is evident in foreign reserves, where the dollar’s share of exports has fallen to a record level, but it continues to show up in commodities,” he pointed the group of strategists.
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