JPMorgan Unveils Instant Dollar-Euro Settlements Using Kinexys Blockchain

JPMorgan will roll out real-dollar settlements against euros within the coming months using the Kinexys blockchain system within its bank. Here, Bloomberg reports that the in-house developed JPM Coin will execute fast and safe transfers amongst the institution’s clients. When approvals from regulators come, JPMorgan also sees a future with the support of sterling settlement on Kinexys.

The system, which processes over $2 billion in transactions daily, currently accepts both dollars and euros, although this volume accounts for only a tiny percentage of JPMorgan’s daily transaction volume of $10 trillion.

Simplified cross-currency transactions

Naveen Mallela is one of the global coheads for Kinexys at JPMorgan, and he said that blockchain technology is trying to achieve operational cost-cutting and better liquidity for clients. In traditional banking, even dollar-euro exchanges take up to two days to settle; Kinexys is trying to significantly cut down that duration, thereby maximizing efficiency and client satisfaction.

As Mallela states, the bank generates revenue from holding balances in the form of fees and liquidity, and the bank looks forward to introducing a new source of income on the platform through foreign exchange spreads that they can tap into.

Profitability

Kinexys grew tenfold in the number of transactions over the past year, and adding further functionality and users is likely to boost the growth rate at JPMorgan. However, the bank’s blockchain business has yet to show profitability. Umar Farooq, global co-head of Payments at JPMorgan, estimated that the firm would take around three to five years to balance costs with revenue as the platform scales.

The four main products of Onyx, JPMorgan’s blockchain division, include blockchain clearing and a tokenization platform. One of the most significant achievements in 2022 was when the bank executed its first-ever public blockchain foreign currency trade, exchanging 100,000 Singaporean dollars for Japanese yen with SBI Digital Asset Holdings on the Polygon blockchain under Singapore’s Project Guardian, led by the Monetary Authority of Singapore.

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