JPMorgan to work with Indian banks on a blockchain-based USD settlement platform

JPMorgan has formed a partnership with six banks in India to develop a blockchain-based settlement system to facilitate interbank dollar transactions. The first project will analyze the bank’s experience in a move that could help India’s Gujarat International Finance Tec-City (GIFT City) become a regional fintech hub.

JPMorgan teams up with Indian banks on blockchain-based settlement system

Wall Street heavyweight JPMorgan has teamed up with six Indian banks to develop a blockchain-based platform to enable interbank dollar settlements in GIFT City – a central business district under construction in Gujarat, India. Banks involved in the project include JPMorgan’s banking division in GIFT City and the country’s largest private lenders, such as ICICI Bank, Axis Bank, HDFC Bank, Yes Bank and IndusInd Bank.

“We will run a pilot project in the next few months as we need to analyze the banks’ experience,” said in an interview.

– said Kaustubh Kulkarni, Senior Country Officer and Deputy Chairman at JPMorgan India.

With a blockchain-powered platform, JPMorgan and its partners aim to shorten the time needed to complete interbank dollar transactions. Under the current settlement system, it can take several hours to complete dollar settlements in India, while it is impossible to settle transactions on weekends and public holidays. By implementing a real-time blockchain-based system, JPMorgan seeks to allow such transactions to be settled around the clock.

From a broader perspective, the partnership is expected to streamline New Delhi’s efforts to make GIFT City an international financial hub and a competitor to Singapore and Dubai.

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JPMorgan remains bullish on Blockchain technology

The new project, pending approval from the International Financial Services Center Authority (IFSCA), is enabled by JPMorgan’s blockchain platform, Onyx, launched in 2020 to allow wholesale payment transactions. According to JPMorgan, Onyx is the world’s first bank-led blockchain platform for the exchange of value, digital assets and information.

Since its launch, Onyx has handled several hundred million short-term loans. Moreover, the Wall Street giant also announced a new Web3 digital identity solution in October 2022, which enables users to “traverse across digital realms” such as decentralized finance (DeFi) and the metaverse.

Earlier this year, JPMorgan reiterated its bullishness on the nascent blockchain technology, proposing the creation of so-called “deposit tokens,” referring to transferable tokens launched by a regulated institution on a blockchain that would serve as an alternative to stablecoins.

Do you think the continued adoption of blockchain by traditional financial giants will be a major growth driver for the technology in the coming years? Let us know in the comments below.

About the author

Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.