The Central Bank of Bahrain has reportedly completed a successful overseas remittance trial enabled by JP Morgan’s digital currency, JPM Coin.
In collaboration with the Wall Street giant’s blockchain and crypto unit, Onyx, Bahrain’s Bank ABC initiated real-time payments for Aluminium Bahrain (Alba) with its counterparties in the US using the JPM Coin system.
According to the report, the trial marks an advanced phase for Bahrain central bank’s endeavor to explore blockchain applications in real-world remittances. The bank’s foreign exchange and IT departments are set to work on introducing and commercializing the technology soon.
JPM Coin serves as a payment rail and deposit account ledger, enabling participating entities to transfer US Dollars held on deposit with the largest bank in the United States, the report added.
The actual amount that was involved in the trial was not mentioned. But, the development is massive for the wholesale payments business, as JP Morgan moves more than $6 trillion every day across more than 100 countries for its corporate clients. Additionally, it will be the first real-world applications for a cryptocurrency in banking, replacing decades-old networks like Swift, with more to come shortly after the international payments are tested.
JPM Coin goes live with commercial uses
Rasheed Al Maraj, governor, Central Bank of Bahrain, says: “We at the Central Bank of Bahrain are extremely pleased to announce the success of this test which aligns with our vision and strategy to continually develop and enrich the capabilities extended to the stakeholders within our financial services sector in the Kingdom using advanced and leading emerging technologies. Through our work with ALBA, Bank ABC and Onyx by J.P. Morgan, we aspire to address and eliminate the inefficiencies and pain points that exist today in the traditional cross-border payments arena.”
Ali Moosa, senior country officer at JP Morgan Bahrain described the project as part of a far larger trend toward the tokenization of financial assets, adding: “The completed test with Alba and Bank ABC will help inform further development of JPM Coin Systems for future use by our correspondent banking partners.”
JP Morgan Chase revealed last year that a few clients had already begun using its own cryptocurrency to instantly send and settle payments around the world.
Dubbed ‘JPM Coin’, the stablecoin facilitates the transfer of payments between institutional clients, the latest step in Wall Street’s evolving approach to the crypto space. However, the coin is available only for international payments for large corporate clients, that have undergone regulatory checks.
The New York-based lender started trials of its JPM Coin in conjunction with corporate clients with the ultimate aim of speeding up transactions, such as cross-border payments and corporate debt issuance.
JPMorgan, which its CEO, Jamie Dimon once bashed cryptocurrencies as a fraud that will not end well for its investors, created a new unit to handle its blockchain business called Onyx.