JPMorgan Chase & Co., the American multinational investment bank, has formed an alliance with six Indian banks to inaugurate a blockchain-based platform that will handle interbank dollar transactions within India’s emerging International Financial Centre. This development, initially reported by Bloomberg, showcases the evolving landscape of financial technology (fintech) in India.
Kaustubh Kulkarni, JPMorgan’s Senior Officer in charge of Indian operations and Vice Chairman for the Asia-Pacific region, indicated that the project would enter a pilot phase in the upcoming months. This period is crucial for gauging the experience and adaptability of the participating banks, which include private sector entities like HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd., IndusInd Bank Ltd., and also JPMorgan’s banking division in GIFT City.
Upon obtaining approval from the International Financial Services Centre Authority, the pilot project will commence this coming Monday, utilizing JPMorgan’s proprietary blockchain platform, Onyx.
The present settlement system poses certain challenges, including potential delays that could stretch to several hours for settlement completion. Moreover, transactions are currently not processed on Saturdays, Sundays, or public holidays. The introduction of a real-time, blockchain-supported system has the potential to eliminate these constraints, offering round-the-clock transactional availability – a significant improvement in efficiency and convenience for the banking sector.
This pioneering initiative further propels the Indian government’s efforts to establish Gujarat International Finance tech -City (GIFT City) as an influential trading center. It echoes the ambition to compete with well-known international hubs like Singapore and Dubai, underlining India’s commitment to becoming a significant player in the global fintech arena.