The project aims to settle dollar trades in real time which is much faster than the current settlement period of a few days.
banking giant JP Morgan The country’s latest international financial hub of GIFT City has partnered with six Indian banks to settle interbank dollar transactions on a blockchain platform.
JP Morgan has joined hands with some of the top private sector Indian lenders such as HDFC Bank Limited, ICICI Bank Limited, Axis Bank Limited, Yes Bank Limited and IndusInd Bank Limited. Speaking in an interview, Kaustubh Kulkarni, Senior Country Officer in India, and Vice President of Asia Pacific at JP Morgan, Said,
“We will run a pilot project for the next few months as we need to analyze the experience of the banks.”
As stated, this JP Morgan project will aim to settle dollar trades in real-time, as against the current settlement period of a few days, which takes place only on weekly working days. Currently, it takes several hours to complete the settlement in the existing system. In addition, there are no settlements on weekends or public holidays. However, the introduction of real-time blockchain-based systems will eliminate this limitation, allowing settlement to take place 24/7.
“By leveraging blockchain technology to facilitate transactions on a 24×7 basis, processing is instantaneous and GIFT City enables banks to support their own time zones and operating hours,” Kulkarni said.
JP Morgan’s Onyx Platform
JP Morgan’s Onyx platform established back in 2020 is its native digital asset network to settle wholesale payment transactions.
The Government of India is planning to set up the Gujarat International Finance Tech-City or GIFT City as an alternative to some of the world’s top business centers such as Dubai and Singapore. As a result, India’s central bank – the Reserve Bank of India – launched a dollar-settled non-deliverable futures market in GIFT City.
However, JPMorgan remains optimistic about the future of blockchain and its implementation within the global banking system. The bank has also initiated several measures in this regard.
JP Morgan has received approval from the International Financial Services Centers Authority to conduct a pilot project on its blockchain platform called Onyx. Over the next few months, the project will analyze the banks’ experience and officially launch on Monday.
The development comes at a time when JP Morgan strategists are pointing to growing signs of de-dollarization. “De-dollarization is evident in FX reserves, where the share of the dollar has hit a record low due to a slump in exports, but still emerging in commodities,” strategists said.
Bhushan is a FinTech enthusiast and has a great understanding of the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
Bitcoin Crypto Related Post