American multinational financial giant JPMorgan Chase has recently announced its plans to leverage blockchain technology to facilitate USD FX trades in India.
JPMorgan has tied up with six Indian banks to introduce a blockchain-based platform to settle interbank dollar transactions in the nation’s newest international financial hub https://t.co/26mgvImN3n
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Primarily, the project which is headquartered in the Gujarat International Finance Tec-City (GIFT City) aims to enable real-time settlement of dollar trades, eliminating the need for lengthy transaction processing times that typically take several days and are only processed during working week hours.
As per reports, the investment bank plans to use its blockchain-based trading platform Onyx to settle interbank dollar transactions. The pilot project which is expected to begin as early as Monday will involve JP Morgan’s banking unit in Gujarat, India, and five other Indian banks namely HDFC Bank, ICIC Bank, Axis Bank, Yes Bank, and IndusInd Bank.
Onyx serves as JPMorgan’s digital assets network, designed for the settlement of wholesale payment transactions, and could potentially support foreign exchange transactions and enable settlements for tokenized assets.
Blockchain Technology Reshapes the Financial Industry
Blockchain technology operates on a decentralized network, meaning it is not controlled by any single entity. As such, it helps to reduce the risk of fraud or hacking attempts, as there is no centralized point of failure.
However, JPMorgan’s move to leverage blockchain technology for USD FX trades in India is part of a broader trend of financial institutions exploring the potential of blockchain.
Using blockchain technology, JPMorgan aims to create a more streamlined and secure process for USD FX trades in India. Traditionally, these trades involve multiple intermediaries, such as banks and clearing houses, which can lead to delays and increased costs. With blockchain, the transaction process can be simplified and made more efficient, as it eliminates the need for intermediaries.
Another advantage of using blockchain technology is that it has the potential to transform the financial industry, as it offers a secure, transparent, and efficient way of conducting transactions.
Meanwhile, regulators in the United States including the Federal Reserve Bank, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) earlier in the year warned financial institutions about the associated risks in investing in cryptocurrencies in the wake of the catastrophic FTX collapse.
