Global financial giant, JPMorgan (JPM), has entered into a strategic collaboration with six Indian banks to streamline interbank dollar transactions using its blockchain-powered platform, Onyx. The partnership is part of a project aimed at making dollar trades real-time and available around the clock, effectively eliminating delays common in the current system. The involved Indian banks are HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and JPM’s banking unit based in Gujurat, India.
This move aligns with the Indian government’s broader strategy of bolstering GIFT City – the Gujarat International Finance Tec-City – to compete with well-established international financial hubs such as Singapore, Hong Kong, Abu Dhabi Global Market (ADGM), and the International Financial Centre (IFC) in Dubai.
JPMorgan plans to kickstart a pilot project in the coming months to evaluate the platform’s performance and user experience. Kaustubh Kulkarni, Senior Country Officer, India, and Vice Chairman, Asia Pacific, at JPMorgan, stated that the primary goal of the pilot is to test the efficacy of blockchain technology in drastically reducing transaction times between banks.
Under current settlement methods, transactions can take several hours to complete, a bottleneck the blockchain technology aims to eliminate. By harnessing the power of Onyx, JPMorgan’s blockchain platform launched in 2020 for wholesale payment transactions, settlements could be concluded in mere seconds. This not only accelerates the transaction speed but also enhances the operational efficiency of banks.
Moreover, Kulkarni outlined the possibility of round-the-clock, year-round transaction capability, provided by the blockchain platform. This would enable GIFT City banks to maintain their local business hours and time zones, thus ensuring uninterrupted and seamless services.
The pilot project has received the green light from the International Financial Services Centre Authority. The success of the project could mark a significant milestone in India’s quest to digitize its banking system, positioning GIFT City as an attractive destination for international finance.
JPMorgan remains optimistic about this innovative foray into financial technology, hoping that the blockchain technology-based solution will set a new standard for interbank transactions, offering better transparency, improved security, and faster settlement times.
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