Wednesday, the Bahrain Central Bank announced that an essay by JP Morgan JPM part digital currency system had been successfully completed. First announced in May, the tests involved commercial bank ABC and its customer Aluminum Bahrain (ALBA). ALBA used the corporate blockchain system for real-time US dollar payments with US counterparties who are also JP Morgan bank account holders. The central bank oversaw the trial.
The JPM Coin system symbolizes money held in JP Morgan bank accounts and is not a stablecoin. Digital currency payments are straightforward, thus avoiding the need for intermediary or correspondent banks. However, this would not be necessary with all the banking parties in the same bank. By digitizing the currency, it becomes programmable, giving businesses greater flexibility in the timing and conditions that trigger payments.
“The pilot has been tested with US dollars, and this technology will allow us to expand our existing offering and introduce more currencies in the future,” said Sael Al Waary, deputy general manager of Bank ABC Group. “We envision major changes across the world with digital currencies, which will play a critical role in enabling future digital economies.”
When the tests were first announced in May, the central bank said it would consider the central bank’s digital currency testing system (CBDC). Although this statement was not repeated, the central bank expressed satisfaction with the system’s ability to eliminate inefficiencies that exist with cross-border payments.
A recent research report by JP Morgan and Oliver Wyman predicted that the CBDC could save $ 100 billion in cross-border payment costs. JP Morgan’s Onyx was involved in a cross-border CBDC trial between France and Singapore.
Other central banks in the region participated in the CBDC trials. In 2020, the central banks of the United Arab Emirates and Saudi Arabia shared the results of a joint CBDC experiment, the Aber project. The UAE is also participating in the M-CBDC bridge project, which includes the central banks of Thailand, Hong Kong and China. This is a wholesale CBDC initiative for interbank cross-border payments rather than a retail CBDC.
Meanwhile, JP Morgan’s Onyx blockchain division is expanding its business. While the JPM Coin system was launched in 2020, users were not disclosed. At the end of December 2021, it was revealed that Siemens was using the platform for automated payments. Other Onyx initiatives include Liink to answer queries about conventional cross-border payments, in particular for AML, and the JP Morgan Repo network.
JP Morgan is also an investor in Partior, a joint venture with DBS Bank and Temasek that is developing a wholesale multi-currency payment system in Singapore. Additionally, Partior is participating in Project Dunbar, the M-CBDC cross-border trial involving Singapore, Australia, South Africa and Malaysia.