American multinational financial behemoth JPMorgan Chase & Co. has partnered with Indian banks to build a blockchain-based platform to settle interbank dollar transactions.
The Indian banks involved are based in the Gujarat International Finance Tec-City (GIFT) City and include HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd., and IndusInd Bank Ltd.
Elevating GIFT City status
Although it is a partnership within the private sector, the move is part of the Indian government’s strategy of elevating GIFT City to a level where it can compete with the likes of Hong Kong, Singapore, the International Financial Centre (IFC) in Dubai, and the Abu Dhabi Global Market (ADGM).
Kaustubh Kulkarni, a senior Indian officer, and vice chairman of Asia Pacific, at JPMorgan, have stated that the institution would be launching a pilot project in the coming months to examine banks’ experience.
JPMorgan and blockchain technology
JPMorgan also plans to use blockchain technology to restructure dollar transactions between financial institutions so that the transactions can be completed in a matter of seconds.
According to Kulkarni, GIFT City banks would be able to maintain their own time zone and business hours once JPMorgan creates the blockchain infrastructure enabling instant transactions around the clock.
JPMorgan’s pilot project using the Onyx blockchain technology is already expected to start on Monday after receiving clearance from the International Financial Services Centre Authority. Onyx, which is a blockchain-based platform for wholesale payment transactions was launched by JPMorgan in 2020.
