- The move is part of the Indian government’s strategy to elevate GIFT City.
- The financial giant plans to use blockchain technology to streamline dollar transactions.
In order to settle interbank dollar transactions, American multinational financial behemoth JPMorgan Chase & Co. has teamed with six Indian banks to build a blockchain-based platform.
The move is part of the Indian government’s strategy to elevate GIFT City, the Gujarat International Finance Tec-City, to a level where it can compete with other major international financial centers like Singapore, Hong Kong, the Abu Dhabi Global Market (ADGM), and the International Financial Centre (IFC) in Dubai.
Banking on Blockchain Tech
According to an interview given by Kaustubh Kulkarni, senior country officer, India, and vice chairman, Asia Pacific, at JPMorgan, the institution would be launching a pilot project over the next few months in order to analyze banks’ experience. Top private lenders such as HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd., and IndusInd Bank Ltd. are among the banks present at GIFT City, he said, along with JPMorgan’s own banking subsidiary.
Moreover, the financial giant plans to use blockchain technology to streamline dollar transactions between financial institutions. It now takes a few hours for settlement to be completed using current settlement methods. However, with blockchain, these deals may be completed in a matter of seconds.
According to Kulkarni, JPMorgan plans to use blockchain technology to make transactions possible around the clock, every day of the year. These transactions would be processed instantly. And GIFT City banks would be able to maintain their own time zone and business hours.
Also, after receiving clearance from the International Financial Services Centre Authority. JPMorgan’s pilot project utilizing the Onyx blockchain technology will begin on Monday. In 2020, JPMorgan launched Onyx, a blockchain-based platform for wholesale payment transactions.
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