Crypto news: JP Morgan recently activated the settlement of euro payments with its new JPM Coin.
Below are all the details.
Summary
Crypto news from JP Morgan: first blockchain transaction
JP Morgan conducted its first blockchain transaction for its corporate clients in Europe using its token.
This JPM Coin transaction was executed by Siemens AG, a major conglomerate based in Germany, and was denominated in euros on JP Morgan’s authorized blockchain.
According to a bank executive told Bloomberg, this is the first JPM Coin transaction denominated in euros.
The authorized blockchain is a distributed ledger that is not publicly accessible. JP Morgan specified that JPM Coin is available exclusively to its institutional clients and is used exclusively for payment settlement.
In addition, banks and other companies in the traditional financial sector (TradFi) are exploring ways to leverage blockchain technologies within their businesses.
Indeed, for them, conducting transactions on a blockchain represents a potential means of securely accelerating the settlement process.
It is worth mentioning that, in 2019, JP Morgan introduced its Coin Services division, which enabled 24/7 transfers between client accounts using blockchain instead of traditional wire transfers.
In addition, transactions on the ledger are no longer limited to business hours, but can take place any day or time.
Although four years have passed, the volume of transactions with JPM Coin stands at around $300 billion. Not only that, JP Morgan also claims to process about 9.8 trillion payments daily.
SAP and Circle’s use of USDC
Moreover, JP Morgan’s clients are not the only ones using crypto for business transactions. Recently, German software giant SAP announced the use of Circle’s US Dollar Coin (USDC) to test cross-border payments.
SAP, the largest non-US software company by revenue, said this will speed up the process for small and medium-sized enterprises (SMEs) looking to send money abroad.
It is worth recalling that USDC is a stablecoin, which is a cryptocurrency pegged to a stable asset, in this case the US dollar.
The company also announced that customers now have the option of receiving USDC as “fake money” to test the payment option.
These tests will be conducted on a separate blockchain from Ethereum and will not yet involve real ERC tokens worth $20.
Crypto companies have relied on the blockchain to process payments and transfer digital assets, similar to the banks that have served the industry.
Previously, New York-based Signature Bank operated Signet, which facilitated conversions between cryptocurrencies and traditional fiat currencies, but it has now been shut down.
JP Morgan’s partnership with six Indian banks
According to a Bloomberg report on 5 June, banking giant JP Morgan has announced a partnership with six major Indian banks to develop a blockchain-based platform that will facilitate interbank settlement of dollar transactions.
The banks involved include HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, Indusind Bank, and JPMorgan’s banking unit at Gujarat International Finance Tec-City, known as GIFT City.
The goal of the blockchain project is to enhance and improve the capabilities of the existing settlement system, as Kaustubh Kulkarni, senior country officer at JPMorgan, explains:
“Leveraging blockchain technology to facilitate transactions on an ongoing basis, processing is instantaneous and allows GIFT City banks to support their own time zone and schedules operational.”
According to the report, the initiative also aims to support New Delhi in positioning GIFT City as an alternative trading hub to Singapore and Dubai.
As previously reported, JPMorgan introduced its blockchain-based platform called Onyx in 2020, aiming to improve the quality of wholesale payment transactions.
The bank would reportedly process short-term loan transactions worth nearly $700 billion through the Onyx platform as of April 2023.
