JP Morgan teams up with Indian banks to implement blockchain tech to facilitate 24X7 dollar transfers

The leading provider of financial services, JPMorgan has partnered with six Indian banks to use an advanced blockchain platform for quick US dollar transfers between banks. This move aims to accelerate India's growing success as a financial hub. The participating banks include HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and JPMorgan's in-house banking division situated within Gujarat International Finance Tec-City, commonly known as GIFT City.

JPMorgan pushing boundaries with blockchain technology

Kaustubh Kulkarni, JP Morgan’s senior country officer shared the company’s plans for a pilot project, which would be launched on Monday as a central part of their initiative. According to Kulkarni, the blockchain project aims to increase the capability of the current settlement system.

Under the current banking settlement system, transactions can take up to hours, and additionally, settlements are also not available on Saturdays, Sundays, and public holidays. This project will break this barrier, claimed Kulkarni stating, By leveraging blockchain technology to facilitate transactions on a 24x7 basis, the processing is instantaneous and enables GIFT City banks to support their own time zone and operating hours.” This means they want to improve how banks handle transactions by using a new platform that allows for instant processing of transactions all day, every day.

From finance to enterprise technology, blockchain is making an impact. Learn how it’s helping improve security, transparency and reliability. https://t.co/BGQTmNUQ65pic.twitter.com/9NaoQU1MAH

— J.P. Morgan (@jpmorgan) June 27, 2022

Advantages of using blockchain technology

Kulkarni highlighted the advantages of using blockchain technology for this purpose. He explained that by using blockchain, transactions can be processed instantly and banks in GIFT City can operate according to their time zone and hours.

This move by JPMorgan supports New Delhi's efforts to establish GIFT City as a strong competitor to trading centres like Singapore and Dubai.

Owing to the said move, the Reserve Bank of India introduced a domestic market for trading US dollars in GIFT City. In simple terms, JPMorgan's initiative with blockchain technology would help the GIFT City become a major financial hub and compete with other global trading centres.

Headquartered in NYC, the financial services provider is planning to conduct a trial project over the next few months to study how banks handle certain situations. They will start the project, using their blockchain platform called Onyx, once they receive approval from the International Financial Services Center Authority.

A little about Onyx

Onyx, established in 2020, is a crucial part of JPMorgan's plan to use blockchain technology for wholesale payment transactions. With the support of JPMorgan's blockchain platform, Onyx, the pilot project is ready to start once it receives approval from the International Financial Services Center Authority.

In other words, Onyx is an important initiative by JPMorgan to use blockchain for payments, and their pilot project is set to begin once it gets the necessary approval.

Other financial institutions imbibing blockchain tech Global banks like Goldman Sachs, Swedish Central Bank, and HSBC are some of the major financial institutions which have or are adopting blockchain technology in their banking system.