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

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

The banking giant has partnered with six major Indian banks to introduce a blockchain-based platform enabling interbank settlement of U.S. 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’s senior country officer Kaustubh Kulkarni said. According to the exec, the platform will allow the banks to process instant transactions 24 hours a day, seven days a week.

Under the current interbank settlement system, transactions could 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, stating:

“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 the GIFT City as an alternative trading center to Singapore and Dubai, the report notes.

According to Kulkarni, JPMorgan will run a pilot project for the next few months to analyze banks’ experience. The pilot project will be launched on Monday, using JPMorgan’s blockchain platform Onyx, after approval from the International Financial Services Center Authority.

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

The news comes amid JPMorgan currency strategists pointing out some signs of emerging de-dollarization. “De-dollarisation is evident in FX [foreign exchange] reserves where the dollar’s share has declined to a record as share in exports, but is still emerging in commodities,” the strategists said.

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