JPMorgan Unveils Blockchain Pilot Project, Empowering Indian Banks to Trade Dollars Efficiently – When Will Bitcoin and Ethereum Follow Suit?

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• • JPMorgan and six Indian banks come together to launch a blockchain-based platform for expedient interbank dollar transactions.
  • The initiative is part of New Delhi’s efforts to position Gujarat International Finance Tec-City (GIFT City) as a formidable competitor to global financial centers.

Taking a quantum leap in interbank dollar transactions, JPMorgan Chase and Co., the American multinational financial behemoth, has come together with six Indian banks. Their collaborative efforts are poised to launch a blockchain-based platform that is set to revolutionize interbank dollar transactions.

This collaborative endeavor is not just about banking efficiency; it carries larger implications for New Delhi’s ambitious plans to elevate the stature of the Gujarat International Finance Tec-City (GIFT City). The city aspires to compete with major international financial centers such as Singapore, Hong Kong, Abu Dhabi Global Market (ADGM), and Dubai’s IFC.

Kaustubh Kulkarni, JPMorgan’s Senior Country Officer for India and Vice Chairman for Asia Pacific, provides deeper insights into the initiative. An upcoming pilot project will form the testing ground for the blockchain-based platform, a trial run to assess the banks’ experiences. The participating banks are top private players, namely HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd., IndusInd Bank Ltd., in addition to JPMorgan’s own banking unit at GIFT City.

The overarching goal of this project is to leverage blockchain technology’s potential to expedite interbank dollar transactions. Existing settlement systems often involve several hours for transaction completion, a delay that the blockchain could effectively bypass, rendering transactions virtually instantaneous.

The pilot project, set to launch on Monday, will use JPMorgan’s blockchain platform, Onyx. The platform, designed for wholesale payment transactions, came into existence in 2020 and has been earmarked for this initiative post the approval from the International Financial Services Center Authority. By embracing blockchain, JPMorgan aims to enable GIFT City banks to conduct transactions on a 24×7 basis, synchronizing with their operational hours and time-zone.

While JPMorgan has taken the lead, they are not alone in recognizing GIFT City’s potential. Several international systemic banks, including Deutsche Bank and MUFG, have opened outlets in the center, signaling a growing trend of global banking entities turning towards blockchain and the emerging financial hub.

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