JP Morgan launches blockchain platform for USD clearing in GIFT City
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Mumbai: JP Morgan, the largest bank by market capitalization, has introduced a real-time interbank settlement pilot project for US dollars in Gujarat International Finance Tec-City (GIFT City) through its blockchain platform, Onyx. The six banks that have joined the platform are Axis Bank, HDFC Bank, ICICI Bank, IndusInd Bank, JPMorgan Chase Bank’s Gift City branch and Yes Bank.
The approval by the International Financial Services Center Authority (IFSCA) has paved the way for interbank transactions in US dollars on the blockchain platform.
Naveen Mallela, managing director and head of Onyx Global Coin Systems at JP Morgan, told TOI that the development of a blockchain-based payment network aligns with GIFT City’s vision of becoming a global financial and IT hub.
“India has arguably the most advanced global payments infrastructure and digital currency rails from Onyx are the next addition to the infrastructure. The Onyx platform we have deployed acts as a 24X7 settlement network for not only the banks in GIFT City but between the IBUs and other entities on the network globally,” Mallela said.
Onyx by JP Morgan, established in 2020, has been a frontrunner in blockchain-based platforms for wholesale payment transactions.
“The interbank dollar clearing pilot is just a small beginning. We see a future for the shared ledger platform as an alternative to existing cross-border payment systems. Onyx can act as a platform for any type of asset – CBDC, currency or government securities that can be tokenized and transactions are settled on a real-time basis without the need for a central counterparty,” he said. The platform will also allow banks and companies to make new transactions such as intraday repos to meet temporary liquidity needs.
“Corporate customers would be able to move their money seamlessly. After the demise of Silicon Valley Bank, we have seen some Indian start-ups looking to transfer their money to alternative accounts in Gift City,” Mallela said.
Injeti Srinivas, chairman of the International Financial Services Centers Authority (IFSCA), the regulator for Gift City, said one of IFSCA’s goals is to incubate new financial technologies supported by a regulatory framework based on global best practices. “I look forward to the performance of this system which promises round-the-clock and instant USD clearing and which will be piloted in IFSCA’s Regulatory Sandbox,” he said.
Currently, anyone wishing to participate in the clearing and settlement of rupee-dollar transactions must open a foreign nostro account. Such Nostro account-based settlement and settlement is also unavailable on weekends and currency holidays.
The pilot project will establish a blockchain-based infrastructure that can support currency transactions and enable settlement of tokenized assets in the future.
The approval by the International Financial Services Center Authority (IFSCA) has paved the way for interbank transactions in US dollars on the blockchain platform.
Naveen Mallela, managing director and head of Onyx Global Coin Systems at JP Morgan, told TOI that the development of a blockchain-based payment network aligns with GIFT City’s vision of becoming a global financial and IT hub.
“India has arguably the most advanced global payments infrastructure and digital currency rails from Onyx are the next addition to the infrastructure. The Onyx platform we have deployed acts as a 24X7 settlement network for not only the banks in GIFT City but between the IBUs and other entities on the network globally,” Mallela said.
Onyx by JP Morgan, established in 2020, has been a frontrunner in blockchain-based platforms for wholesale payment transactions.
“The interbank dollar clearing pilot is just a small beginning. We see a future for the shared ledger platform as an alternative to existing cross-border payment systems. Onyx can act as a platform for any type of asset – CBDC, currency or government securities that can be tokenized and transactions are settled on a real-time basis without the need for a central counterparty,” he said. The platform will also allow banks and companies to make new transactions such as intraday repos to meet temporary liquidity needs.
“Corporate customers would be able to move their money seamlessly. After the demise of Silicon Valley Bank, we have seen some Indian start-ups looking to transfer their money to alternative accounts in Gift City,” Mallela said.
Injeti Srinivas, chairman of the International Financial Services Centers Authority (IFSCA), the regulator for Gift City, said one of IFSCA’s goals is to incubate new financial technologies supported by a regulatory framework based on global best practices. “I look forward to the performance of this system which promises round-the-clock and instant USD clearing and which will be piloted in IFSCA’s Regulatory Sandbox,” he said.
Currently, anyone wishing to participate in the clearing and settlement of rupee-dollar transactions must open a foreign nostro account. Such Nostro account-based settlement and settlement is also unavailable on weekends and currency holidays.
The pilot project will establish a blockchain-based infrastructure that can support currency transactions and enable settlement of tokenized assets in the future.
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