Bahrain’s Bank ABC unveils JPM Coin DLT payments with JP Morgan – Ledger Insights
Bank ABC in Bahrain has launched instant blockchain-based payments using JP Morgan’s Coin Systems, expanding the usage of JPM Coin beyond its current clients. Initially, this solution will be used for payment corridors between Bahrain and the US, as well as the UK, Singapore, and Hong Kong. This move is in line with the Central Bank of Bahrain’s strategic vision to embrace innovation and digitize the country’s financial services sector.
JPM Coin is described as a “first-of-its-kind commercial payment offering” that allows cross-border commercial transactions between Bahrain and US corridors to be executed instantly, atomically, and with certainty. The system moves the funds into a separate account and tokenizes them for use on the private permissioned distributed ledger technology (DLT) system.
Bank ABC plans to utilize this solution for high-value payments, enabling faster and cheaper settlement. It also supports real-time treasury management for large corporates. The euro and additional locations are expected to be added to the solution in the future.
The collaboration between JP Morgan and Bank ABC began with a trial of JPM Coin earlier this year. The trial aimed to enable Bank ABC’s client, Aluminium Bahrain (ALBA), to make real-time US dollar payments to suppliers in the United States using JP Morgan bank accounts. The successful trial paved the way for the soft-launch of instant blockchain-based payments.
JP Morgan’s blockchain and digital currency division, Onyx, developed the JPM Coin system. It is considered as supporting “blockchain-based bank accounts” rather than deposit tokens. The bank is involved in other blockchain projects such as Partior, a DLT network for interbank cross-border payments, and Project Guardian, which used public blockchain deposit tokens for foreign exchange.
In conclusion, Bank ABC’s soft-launch of instant blockchain-based payments using JP Morgan’s Coin Systems demonstrates the increasing adoption of blockchain technology in the financial sector. This solution aims to streamline cross-border transactions, providing faster and more cost-effective settlement options. It also aligns with the digital transformation efforts of Bahrain’s Central Bank, as they aim to eliminate inefficiencies in traditional payment systems and foster economic activity.
