JPMorgan Chase & Co. has partnered with six Indian banks to launch a blockchain-based platform that will facilitate interbank dollar transactions in India’s latest financial hub. The development is expected to strengthen the Reserve Bank of India’s attempt to boost Gujarat International Finance Tec-City (GIFT City) as an alternative trading center to Dubai and Singapore.
As per current settlement systems, transactions could take up to several hours to settle, and they cannot be processed on weekends and public holidays. This limitation could be eliminated by the new system’s real-time blockchain-backed system, which will be available 24 hours a day.
Several top private banks, including ICICI Bank, HDFC Bank, Axis Bank, Yes Bank, and IndusInd Bank, will participate in the six-month pilot project, along with JPMorgan’s banking unit. According to Kaustubh Kulkarni, Senior Country Officer, India, and Vice-Chairman, Asia Pacific at JPMorgan, the pilot project will analyze banks’ experiences. The project will launch on Monday after receiving consent from the International Financial Services Center Authority.
The launch of the platform using JPMorgan’s blockchain platform Onyx is expected to revolutionize the banking industry, facilitating instantaneous processing of transactions in an industry that demands promptness and perfections. According to Kaustubh Kulkarni, “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.”
This development is expected to facilitate quick and cheap transactions, thereby minimizing the turnaround time for interbank transactions and reducing costs. The integration of blockchain technology could foster transparency among banks, reducing the possibility of fraudulent incidents and facilitating seamless operations.
The blockchain-based system for interbank dollar transactions is expected to revolutionize currency trading, providing a much-needed boost for traders, large corporations, and small and medium-sized enterprises. In addition, the system’s ability to operate around the clock could drive adoption, people can now engage in trades at any time of the day with their currency trading broker.
In conclusion, the JPMorgan Chase & Co. and Indian banks’ partnership to launch a blockchain-based platform for interbank dollar transactions could be the missing piece in India’s quest to rival Singapore and Dubai as an alternative trading center. The platform’s round-the-clock availability and prompt processing of transactions are expected to usher in a new era of currency trading in India and minimize the turnaround time for interbank transactions. Forex traders should keep an eye on the evolution of the blockchain-based system and take advantage of emerging opportunities.