Global financial services company JPMorgan continues to explore the benefits of blockchain, implementing the technology 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, Bloomberg reported 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 existing settlement system, said Kaustubh Kulkarni, a senior country officer at JPMorgan. According to the executive, the platform will allow banks to process instant transactions 24 hours a day, seven days a week.
Under the current interbank settlement system, transactions can take several hours. In addition, the sale is not available on Saturdays, Sundays or holidays. The JPMorgan blockchain pilot will remove this barrier, Kulkarni claimed, stating:
"By leveraging blockchain technology to facilitate 24/7 transactions, processing is instant and allows GIFT City banks to support their own time zone and hours of operation."
The initiative is also aimed at helping New Delhi position GIFT City as an alternative shopping center to Singapore and Dubai, the report notes.
According to Kulkarni, JPMorgan will run a pilot project over the next few months to test the banks' experience. The pilot project will launch on Monday, using JPMorgan's Onyx blockchain platform, after approval from the International Financial Services Center Authority.
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As previously reported, JPMorgan launched its Onyx blockchain-based platform in 2020, with the aim of improving the quality of wholesale payment transactions. The bank reportedly processed nearly $700 billion in short-term loan transactions through Onyx as of April 2023.
The news comes amid JPMorgan currency strategists pointing to some signs of emerging de-dollarization. โDe-dollarization is evident in FX [foreign exchange] reserves where the share of the dollar has decreased to a record as a share in exports, but is still emerging in raw materialsโ, the strategists saying.
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