In March we reported that JP Morgan was planning a pilot for blockchain-based bank accounts for U.S. dollars in India’s GIFT City, an international financial center. Bloomberg reported that the pilot started today and will run for a few months, according to Kaustubh Kulkarni, senior country officer at JP Morgan.
India is promoting Gujarat International Finance Tec-City, or GIFT City as a competitor to Singapore and Dubai. The Reserve Bank of India recently opened its domestic non-deliverable forward market for forex derivatives to banks operating in International Financial Services Centers (IFSCs) such as GIFT City.
Rupee dollar forex contracts need to settle in dollars which would usually only happen during U.S. bank opening hours.
However, JP Morgan clients with an Onyx JPM Coin bank account can transact 24/7. Hence the five Indian banks within GIFT City – HDFC Bank, ICICI Bank, Axis Bank, Yes Bank and IndusInd Bank – and JP Morgan are participating in the trial, which we understand is within a sandbox environment.
The Onyx JPM Coin solution only works for interbank payments where the other banks have Nostro accounts at JP Morgan, as in this case. JP Morgan also co-founded Partior, which targets wholesale cross border payments using a blockchain infrastructure. Apart from JP Morgan, Partior also boasts DBS Bank, Standard Chartered and SMBC as participants. And our sources stated that Deutsche Bank has either signed up or is close to doing so.