JPMorgan to use blockchain for offering dollar-based settlement services to India’s banks

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Leading US investment bank JPMorgan announced recently that it intends to trial applications on blockchain technology and offer dollar-based settlements to Indian banks. With India becoming increasingly open to crypto, JPMorgan plans to experiment with blockchain, initially only in banks in India’s GIFT City.

India has been steadily advancing toward full-scale #blockchain adoption, and JPMorgan’s latest initiative might offer a bump for realizing the goals. https://t.co/W0wZVwBtwT

— Kendall (@KendallMcK88) March 30, 2023

The city is known for being an economic free trade zone, and it is actually on a similar level with major global financial centers, such as Abu Dhabi Global Market.

JPMorgan launches blockchain-based USD accounts for Indian banks

In its recent report, JPMorgan said that it intends to experiment by allowing banks to open on-chain Nostro accounts. They would be able to make dollar payments and enjoy instant settlements thanks to blockchain technology. The ability to make payments would remain available 24/7.

So far, the banks of India have only used the SWIFT payment system for making transactions. However, they were only able to operate during US business hours, which made the situation quite challenging. To make matters worse, making transactions over the weekend was not possible at all. By switching to blockchain payments, all of these issues could be eliminated.

Investment bank JPMorgan has announced that it will trial applications on blockchain technology to offer dollar-based settlement services to financial institutions in India. By using blockchain, JPMorgan says that settlement times will be made instantly, and participants will be… pic.twitter.com/64Al1FVm6G

— 360 Core Inc. (@360CoreInc) March 30, 2023

Of course, JPMorgan’s plans for accounts that run on the blockchain are not a completely new concept. Something similar was previously proposed by TassatPay, and the embattled Signature Bank also used blockchain to enable payments around the clock. The technology has proven to be very effective, so many predicted a large-scale application in months and years to come.

India is rapidly moving toward blockchain adoption

JPMorgan’s experiments are also a part of India’s plan to further improve GIFT City, and make it more competitive. The country wishes to make it comparable to other major free trade zones around the globe. It also helps that GIFT City is not subject to Indian regulations, and it mostly exists as a sort of quasi-foreign territory. Thanks to this, multiple international institutions have based their operations in the area, including MUFG and Deutsche Bank.

As for JPMorgan, it has been exploring blockchain technology since 2022. At the time, it created its Onyx Unit, as well as its JPM Coin. It also became a co-founder of a blockchain network that supports a number of transactions in Singapore known as Partior.

Meanwhile, as mentioned, India has been advancing toward full-scale blockchain adoption, with the new JPMorgan initiative being the next big step on that road. Nirmala Sitharaman, the country’s Finance Minister, confirmed that the country intends to make blockchain the focal point of its tech aspirations. At the moment, the next big milestone is a 46% adoption rate.

So far, blockchain has already found applications in the security, health, manufacturing, and even property sectors. However, India still has a rather draconian tax policy when it comes to digital assets, which might have a negative impact on the government’s plans.

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