JP Morgan, 6 Indian banks partner to settle USD transactions on blockchain

Investment bank JP Morgan has partnered with six major Indian banks to settle interbank dollar transactions using its blockchain-based trading platform, Onyx.

As per media reports, the pilot project, set to commence on Monday, will involve HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IndusInd Bank, and JPMorgan's own banking unit in Gujarat, India.

The primary objective of this initiative is reportedly to enable real-time settlement of dollar trades, thereby eliminating the need for lengthy transaction processing times that typically extend over several days, and are limited to working week hours.

The project's headquarters will be located at the Gujarat International Finance Tec-City (GIFT City)--an endeavor to establish an international finance hub, rivalling renowned global financial centers such as Singapore and Dubai.

Established in 2020, Onyx serves as JPMorgan's digital assets network, specifically designed for the settlement of wholesale payment transactions.

Onyx has played a role in building the world's first bank-led blockchain platform, facilitating the exchange of value, information, and digital assets.

In the future, the project could potentially support foreign exchange transactions and enable settlements for tokenised assets.

In fact, JP Morgan has remained steadfast in its plan to tokenise traditional financial assets despite a downturn in crypto markets and regulatory uncertainty across countries.

As per a CoinDesk report from April 2023, the bank has processed almost $700 billion in transactions in short-term loans on Onyx.

The report described Onyx as a "permissioned version of Ethereum" where the bank's customers can trade tokens that "denote ownership rights to US Treasurys as well as use blockchain bank accounts."