JPMorgan launches blockchain-based dollar accounts for banks in India

Investment bank JPMorgan has announced that it will trial applications on blockchain technology to offer dollar-based settlement services to financial institutions in India.

According to a report from the Economic Times, JPMorgan’s experiment with blockchain will be restricted to banks in India’s GIFT City, an economic free trade zone that competes with international financial centers like Abu Dhabi Global Market (ADGM). The report noted that JPMorgan’s pilot would allow participating banks to open on-chain Nostro accounts to make dollar payments.

By using blockchain, JPMorgan says that settlement times will be made instantly, and participants will be allowed to make transactions 24/7. Traditionally, Indian banks relied on the SWIFT payment system to make transactions, but they were bogged by the restriction of operating only during U.S. open hours, making transactions over the weekend impossible.

JPMorgan’s plans for blockchain-based accounts are not a wholly novel concept, as the U.S.-based TassatPay proposed a similar offering to users. The embattled Signature Bank also relied on blockchain to support 24/7 payments to its customers, and given its effectiveness, pundits are predicting a large-scale application of the technology.

The experiments are part of India’s plans to improve GIFT City to make it compete favorably with other global free trade zones. GIFT City is not subject to the bulk of Indian regulations and is widely considered to be a quasi-foreign territory, leading to several international institutions setting up operations in the country, including Deutsche Bank and MUFG.

JPMorgan has been dabbling with blockchain since 2022 with the creation of its Onyx Unit and the development of the JPM Coin. The global investment bank was roped in as a co-founder in Partior, a blockchain-based network supporting multiple transactions based in Singapore.

Confirming India’s ambitions

India has been steadily advancing toward full-scale blockchain adoption, and JPMorgan’s latest initiative might offer a bump for realizing the goals. The country’s Finance Minister, Nirmala Sitharaman, confirmed that it would be making blockchain the focal point of its technological aspirations while targeting a 46% adoption rate.

In line with the government’s stance, the National Institution for Transforming India (NITI) Aayog recently announced the launch of a blockchain learning module, which was designed to deepen the talent pool for global digital currency firms looking to set up operations in the country.

Blockchain has since found applications in the health, security, manufacturing, and property sectors of the Indian economy, but a draconian tax policy against virtual asset providers casts a shadow of doubt on the government’s ambitions.

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