In India, JPMorgan uses blockchain for interbank U.S. dollar transactions as global de-dollarization signs grow.
JPMorgan Chase and Co., a global leader in financial services, is employing blockchain technology to break free from some constraints of conventional finance.
Bloomberg reported on June 5 that the financial giant has formed a partnership with six major Indian banks to launch a blockchain-based platform that enables inter-bank settlement of U.S. dollar transactions.
HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and JP Morgan's own banking unit at Gujarat International Finance Tec-City, or GIFT City, are among the participating banks.
According to JPMorgan's senior country officer, Kaustubh Kulkarni, the blockchain project aims to increase the settlement system's capacity. The executive claims that the platform will enable banks to process instant transactions seven days a week, twenty-four hours a day.
Under the current inter-bank settlement framework, exchanges could take as long as a few hours. Settlement is also not possible on Saturdays, Sundays, or holidays. JP Morgan's blockchain pilot will eliminate this obstruction, Kulkarni asserted, expressing:
“By leveraging blockchain technology to facilitate transactions on a 24x7 basis, processing is instantaneous and enables GIFT City banks to support their own time-zone and operating hours.”
According to the report, the initiative also aims to assist New Delhi in positioning the GIFT City as an alternative trading center to Singapore and Dubai.
Kulkarni stated that JP Morgan will conduct a pilot project over the next few months to evaluate the experience of banks. The pilot undertaking will be sent off on Monday, utilizing JP Morgan's blockchain stage Onyx, after endorsement from the Worldwide Monetary Administration Place Authority.
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As recently detailed, JP Morgan sent off its Onyx blockchain-based stage in 2020, meaning to work on the nature of discount installment exchanges. As of April 2023, the bank was said to have used Onyx to handle short-term loan transactions worth nearly $700 billion.
The news comes as currency strategists at JP Morgan point to some signs that de-dollarization is coming. The strategists stated, "De-dollarization is evident in FX [foreign exchange] reserves, where the dollar's share in exports has fallen to a record low but is still emerging in commodities."
(HELEN PARTZ, CoinTelegraph, 2023)