(Bloomberg) -- JPMorgan Chase & Co. has tied up with six Indian banks to introduce a blockchain-based platform to settle interbank dollar transactions in the nation’s newest international financial hub.
“We will be running a pilot project for the next few months as we need to analyze banks’ experience,” Kaustubh Kulkarni, senior country officer, India and vice chairman, Asia Pacific at JPMorgan, said in an interview. The banks include top private lenders like HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd. and IndusInd Bank Ltd, in addition to JPMorgan’s own banking unit at GIFT City, he said.
The move will provide a further fillip to New Delhi’s attempt to position the Gujarat International Finance Tec-City, or GIFT City, as an alternative trading center to Singapore and Dubai. The Reserve Bank of India has started a domestic non-deliverable forward market settled in dollars at GIFT City.
Under the existing settlement system, it could take a few hours for the settlement to complete. Moreover, transactions are not settled on Saturdays and Sundays or public holidays. The real-time blockchain-backed system will remove this hindrance to make it available round-the-clock.
“By leveraging blockchain technology to facilitate transactions on a 24x7 basis, processing is instantaneous and enables GIFT City banks to support their own time-zone and operating hours,” said Kulkarni.
The pilot project will be launched on Monday, using JPMorgan’s blockchain platform Onyx, after approval from the International Financial Services Center Authority. Onyx, JPMorgan’s blockchain-based platform for wholesale payment transactions, was formed in 2020.
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