JPMorgan, in its quest to investigate the advantages of blockchain, has used the technology to perform interbank dollar transactions in India, eradicating some limitations of conventional finance.
Bloomberg reported on June 5 that JPMorgan has partnered with six major Indian banks to launch a blockchain-based platform for the intermediary settlement of dollar transactions.
HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and JPMorgan’s banking unit are participating institutions at Gujarat International Finance Tec-City or GIFT City.
According to JPMorgan’s senior country officer, Kaushik Kulkarni, the blockchain project seeks to increase the settlement system’s capacity.
According to the executive, the platform will enable institutions to conduct instant transactions twenty-four hours a day, seven days a week.
Transactions could take up to several hours under the current interbank settlement system. In addition, settlement is unavailable on weekends and public holidays.
Kulkarni asserted that JPMorgan’s blockchain pilot would eliminate this barrier, stating:
“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.”
According to the report, the initiative also seeks to assist New Delhi in establishing GIFT City as an alternative trading hub to Singapore and Dubai.
According to Kulkarni, JPMorgan will conduct a pilot initiative to analyze the experience of banks over the next few months.
After receiving approval from the International Financial Services Center Authority, the pilot project will be inaugurated on Monday using JPMorgan’s Onyx blockchain platform.
According to previous reports, JPMorgan introduced its blockchain-based platform Onyx in 2020 to enhance the quality of wholesale payment transactions.
As of April 2023, the bank reportedly processed nearly $700 billion in short-term loan transactions via Onyx.
The news comes as currency strategists at JPMorgan identify signs of the dollar’s imminent devaluation. “De-dollarisation is evident in FX reserves, where the dollar’s share has fallen to a record low as the dollar’s share in exports has declined, but is still emerging in commodities,” the strategists explained.
