JPMorgan uses blockchain for 24/7 dollar transfers with Indian banks

Global financial services company JPMorgan continues to explore the benefits of blockchain, deploying the technology to eliminate some limitations of traditional finance.

JPMorgan has partnered with six major Indian banks to introduce a blockchain-based platform that enables interbank settlement of dollar transactions, Bloomberg reported on June 5.

The participating banks include HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank and JPMorgan’s own banking unit at Gujarat International Finance Tec-City, or GIFT City.

The blockchain project aims to expand the capacity of the existing settlement system, JPMorgan senior country officer Kaustubh Kulkarni said. According to management, the platform will allow banks to process instant transactions twenty-four hours a day, seven days a week.

Under the current interbank settlement system, transactions can take up to several hours. Additionally, settlement is not available on Saturdays, Sundays or public holidays. JPMorgan’s blockchain pilot will remove this barrier, Kulkarni claimed, saying:

“By leveraging blockchain technology to facilitate transactions on a 24×7 basis, processing is instantaneous and enables GIFT City banks to support their own time zone and operating hours.”

The initiative also aims to help New Delhi position GIFT City as an alternative trade hub to Singapore and Dubai, the report notes.

According to Kulkarni, JPMorgan will run a pilot project in the coming months to analyze the banks’ experiences. The pilot project will be launched on Monday, using JPMorgan’s blockchain platform Onyx, following approval from the International Financial Services Center Authority.

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As previously reported, JPMorgan launched its blockchain-based platform Onyx in 2020, aiming to improve the quality of wholesale payment transactions. The bank is said to have processed nearly $700 billion in short-term loan transactions via Onyx as of April 2023.

The news comes as JPMorgan’s currency strategists point to some signs of currently emerging de-dollarization. “De-dollarization is evident in foreign reserves where the dollar’s share has fallen to a record as its share in exports fell, but still appears in commodities,” the strategists said.

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