JPMorgan has formed a partnership with six banks in India to develop a blockchain-based settlement system to facilitate interbank dollar transactions. The initial project will analyze the Indian banks' experience in a move that could help India’s Gujarat International Finance Tec-City (GIFT City) become a regional fintech hub.

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JPMorgan Teams Up with Indian Banks on Blockchain-Based Settlement System

Wall Street heavyweight JPMorgan (JPM) has teamed up with six Indian banks to develop a blockchain-based platform to enable interbank dollar settlements in GIFT City – a central business district under construction in Gujarat, India. Banks involved in the project include JPMorgan’s banking division in GIFT City and the nation’s biggest private lenders, such as ICICI Bank, Axis Bank, HDFC Bank, Yes Bank, and IndusInd Bank.

“We will be running a pilot project for the next few months as we need to analyze banks’ experience,” , said in an interview.

– said Kaustubh Kulkarni, senior country officer and vice chairman at JPMorgan India.

With a blockchain-powered platform, JPMorgan and its partners aim to shorten the time needed to complete interbank dollar transactions. Under the current settlement system, finalizing dollar settlements in India could take several hours, while settling transactions on weekends and public holidays is impossible. By implementing a real-time, blockchain-based system, JPMorgan seeks to allow such transactions to be settled around the clock.

From a broader perspective, the partnership is expected to streamline New Delhi’s efforts to turn GIFT City into an international financial hub and a competitor to Singapore and Dubai.

JPMorgan Remains Bullish on Blockchain Technology

The new project, which awaits approval from the International Financial Services Center Authority (IFSCA), is enabled by JPMorgan’s blockchain platform, Onyx, launched in 2020 to allow wholesale payment transactions. According to JPMorgan, Onyx is the world’s first bank-led blockchain platform for exchanging value, digital assets, and information.

Since its launch, Onyx has handled several hundred million short-term loans. Moreover, the Wall Street giant also announced a new Web3 digital identity solution in October 2022, which enables users to “traverse across digital realms” such as decentralized finance (DeFi) and the metaverse.

Earlier this year, JPMorgan reiterated its bullishness on the nascent blockchain technology, proposing the creation of the so-called “deposit tokens,” referring to transferable tokens launched by a regulated institution on a blockchain that would serve as an alternative to stablecoins.

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