Indian banks start opening blockchain accounts

In mid-June 2023, investment bank JPMorgan announced the launch of a pilot project to conduct interbank dollar transactions in India using blockchain. As part of the pilot project, six Indian banks will open blockchain accounts that will allow instant settlements (24x7) with JPMorgan's branch in Gujarat International Financial Tech City (GIFT City).

JPMorgan has started working with Axis Bank, ICICI Bank, Yes Bank, HDFC Bank and IndusInd Bank. According to JPMorgan India chief Kaustubhi Kulkarni, by using blockchain technology to facilitate transactions in 24/7 mode, data processing is instant, allowing GIFT City banks to maintain their own time zone and opening hours. According to Kulkarni, the project will last until the end of 2023 and will be aimed at improving the current state of interbank operations. For June 2023, foreign exchange transactions in India are being destroyed due to several delays, including a lack of settlements over the weekend and shortcomings related to the SWIFT payment system. Kulkarni added that using JPMorgan's Onyx JPM Coin solution will allow transactions to be settled around the clock. However, the blockchain-based solution will only apply if participating banks have Nostro accounts with JPMorgan and have been authorized by the International Financial Services Center.

Indian banks start opening blockchain accounts

Plans for the experiment have been in the works since March 2023, with industry participants suggesting the experiments could be expanded beyond GIFT City. The project from JPMorgan follows a decision by the Reserve Bank of India (RBI) to create a domestic non-deliverable forward market in GIFT City with settlements in US dollars .

For 2023, JPMorgan has significant experience combining finance with blockchain, co-founding Party, a cross-border payments platform that uses distributed books as its underlying infrastructure. Major banking conglomerates DBS Bank, SMBC and Standard Chartered are experimenting with Party for international settlements.

According to CoinGeek, in India, the government and enterprises are determined to increase the level of blockchain implementation in the country. Several blockchain training modules have been launched to expand the state's talent pool, despite a tightening stance against digital currencies by financial authorities. However, Indian authorities believe they can reach 46% of blockchain adoption through integration into key sectors such as supply chain, finance, security and real estate. Although the Central Bank of India and the Ministry of Finance do not seem very interested in implementing blockchain in the financial sector, state and municipal authorities rely on the technology to keep records and streamline administrative processes.^[1]

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