Following an extensive two-year period of experimentation, JPMorgan and the Bahraini bank have agreed to provide payment settlement services in various countries using the U.S. dollar. Additionally, there are intentions to extend these services further to encompass euro transactions in the future.
Blockchain-Based Payments Are Becoming Increasingly Attractive
Bank ABC, a financial institution headquartered in Bahrain, has decided to utilize JPMorgan’s esteemed Onyx Coin Systems to facilitate blockchain-powered cross-border payments. This implementation is set to commence in a controlled and preliminary manner, commonly called a soft launch. The upcoming service is anticipated to exhibit enhanced cost-effectiveness and a notable reduction in settlement times compared to conventional solutions.
Bank ABC initially decided to employ the U.S. dollar as the primary currency for facilitating transactions encompassing Bahrain, the United States, the United Kingdom, Singapore, and Hong Kong. The partners are strategically considering the expansion of their operational footprint, focusing on establishing additional locations and facilitating an increased volume of transactions denominated in the euro currency. The development of programmable payments is currently underway.
The Launch of the Service Was Preceded by a Long Period of Testing
The service has been initiated after an extensive two-year period of experimentation. In an official statement, Naveen Mallela, the Global Head of Onyx Coin Systems, expressed the following sentiment:
The capability facilitates the instantaneous, atomic, and unequivocal execution of cross-border commercial transactions within the corridors connecting Bahrain and the United States.
The newly introduced service was formulated through a meticulous and extensive collaborative effort with the esteemed Central Bank of Bahrain (CBB). In January 2022, a trial overseen by the Central Bank of Bahrain (CBB) was conducted. JPM Coin facilitated payment settlements between Aluminium Bahrain, a national entity, and its U.S. counterparties via Bank ABC.
ACCORDING TO THE OFFICIAL STATEMENT, Bank ABC has established a pioneering collaboration with JPMorgan’s esteemed blockchain service in the Middle East. Recently, Onyx has successfully established partnerships with six prominent Indian banks as part of a pilot project to facilitate USD settlement. A strategic collaboration was also found with the esteemed German conglomerate Siemens to conduct payments in the European currency, namely euros. The JPM Coin was introduced in the year 2020.
In recent years, Bahrain has undertaken measures to enhance the modernization of its financial system. In March 2022, Binance was granted a license in the kingdom, thus becoming the inaugural member of the Cooperation Council for the Arab States of the Gulf to authorize an international cryptocurrency exchange, surpassing Dubai by a narrow margin. Binance has established a partnership with EazyPay to facilitate the provision of retail payment services in Bahrain. However, the current availability of said service remains to be determined.