JPMorgan Chase & Co. has announced the launch of its blockchain-based dollar accounts for banks in India, marking the first time a major U.S. bank is offering such services to Indian financial institutions. The new accounts will enable banks to make cross-border payments more efficiently and securely, without the need for manual intervention, by leveraging distributed ledger technology (DLT).
According to a report from the Economic Times, JPMorgan is delving into the world of blockchain technology with an experimental pilot program in India’s GIFT City. This rapidly-growing economic free trade zone, which competes with international financial hubs like Abu Dhabi Global Market (ADGM), provides a perfect testbed for the project. The report noted that JPMorgan’s pilot would allow participating banks to open on-chain Nostro accounts – specialized accounts used for holding foreign currencies – in order to facilitate dollar payments.
Improvement of India’s traditional banking system
JPMorgan recently announced that they are utilizing blockchain technology to facilitate instantaneous global settlements between participants.
Unfortunately, this system was limited by its restriction of only operating during U.S. open hours. This meant that no transactions could take place over the weekend. Now, with blockchain, Indian banks will be able to make transactions 24/7, enabling them to make more timely and efficient payments than ever before.
The accounts also offer greater transparency and traceability throughout the payment process, helping to reduce fraud risk and improve customer service. Banks will be able to access this service through JPMorgan’s global payments platform, which connects over 7,500 financial institutions in more than 100 countries worldwide.
This move is part of JPMorgan’s broader effort to expand its presence in the Indian banking sector and offer innovative solutions that facilitate smoother international banking transactions.
