The American multinational financial giant JPMorgan Chase and Co. has partnered with six Indian banks to launch a blockchain-based platform to settle interbank dollar transactions.
The move further aims to push New Delhi’s attempt to position the Gujarat International Finance Tec-City, or GIFT City, which aims to compete with other major international financial centers such as Singapore, Hong Kong, Abu Dhabi Global Market (ADGM) and Dubai’s IFC.
JPMorgan to run a pilot project with Indian banks
Kaustubh Kulkarni, senior country officer, India and vice chairman, Asia Pacific at JPMorgan, said in an interview that they will be running a pilot project for the next few months as they need to analyze banks’ experience. The banks include top private lenders like HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd. and IndusInd Bank Ltd, in addition to JPMorgan’s own banking unit at GIFT City, he added.
The banking giant aims to utilize blockchain for faster and more efficient interbank dollar transactions. Currently, with the existing settlement systems, it takes about a few hours for the settlement to complete transactions. But with blockchain, these transactions could be done almost instantaneously.
The pilot project will use JPMorgan’s blockchain platform Onyx
JPMorgan aims to leverage blockchain technology to facilitate transactions on a 24×7 basis, processing instantaneously and enabling GIFT City banks to support their own time-zone and operating hours, Kulkarni revealed.
The pilot project is scheduled to launch on Monday, using JPMorgan’s blockchain platform Onyx, after approval from the International Financial Services Center Authority. Onyx, JPMorgan’s blockchain-based platform for wholesale payment transactions, was formed in 2020. JPMorgan is not the only major bank to open itself to the GIFT City, several international systemic banks opened up shop in the center, including ,Deutsche Bank and MUFG.
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