JPMorgan has joined forces with six Indian banks to test the potential of blockchain technology to provide 24/7 settlement services for Indian FIs.
The Indian banks include HDFC, ICICI, Axis Bank, Yes Bank, and IndusInd Bank. These banks are key players in the Indian financial sector, renowned for their comprehensive suite of financial services and commitment to leveraging digital technology to meet customer needs.
The partnership aims to test the potential of blockchain technology to provide round-the-clock, dollar-based settlement services for Indian financial institutions. This pioneering endeavour seeks to overcome the current constraints of the Swift messaging system and Nostro accounts, which restrict the processing of dollar payments to US office hours, making transactions unavailable over weekends.
JPMorgan, headquartered in New York, offers a broad range of financial services including asset management, commercial banking, investment banking, and treasury and securities services.
The Indian banks in this partnership, HDFC, ICICI, Axis Bank, Yes Bank, and IndusInd Bank, provide a comprehensive range of banking services and products encompassing retail banking, corporate banking, international banking, and other financial services. All these banks have been significant contributors to the digitalisation of banking services in India.
Under the pilot programme, the Indian banks will open on-chain Nostro accounts with JPMorgan’s branch in Gift City. The blockchain-based system is expected to facilitate instant, 24×7 settlement between the accounts held at the US bank. Essentially, it will create a private intra-correspondent banking network, redefining the traditional banking hours and enabling seamless money transfer.
The interbank payments network, part of JPMorgan’s blockchain unit, Onyx, has previously roped in Siemens as an anchor client and run trials with the Central Bank of Bahrain. By expanding to Indian banks, it seeks to further test and develop its innovative blockchain solution.
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