In a significant leap for blockchain technology, Bahrain’s Bank ABC has teamed up with JPMorgan to use its Onyx blockchain for cross-border payments. The strategic move marks the first Middle Eastern partnership with JPMorgan’s blockchain service, positioning Bahrain’s Bank at the frontlines of financial technology in the region.
This evolution into blockchain-based cross-border transactions is not without tangible benefits; in contrast to traditional payment solutions, this approach is more cost-effective and promises to drastically reduce settlement times. Initially, the blockchain cross-border payments will pilot in transactions involving the United States, United Kingdom, Singapore, and Hong Kong, all utilizing the US dollar. However, both partners have aspirations to extend the service to more locations, with transaction expansions to include the euro. Intriguingly, programmable payments are also on the horizon.
This service comes after two years of experimental trials. An exemplar of these tests was a transaction conducted in January 2022, where JPM Coin was utilized to settle payments between Aluminium Bahrain and its US counterparts via Bank ABC. The successful trial showcased blockchain technology becoming a reality for corporate finance, illustrating how it can underpin cross-border commercial dealings and instantly provide transaction certainty.
However, despite the apparent advantages, one cannot ignore underlying questions around this progressive step. Notably, is the new technology robust enough to manage the huge volumes of real-world money flows? Moreover, can it securely navigate the complexities of international transactions and regulatory environments? Time will only tell.
In the meantime, Bahrain is ramping up its strides towards financial modernization. For instance, the kingdom awarded a license to international crypto exchange Binance in March 2022, solidifying Bahrain’s efforts to bolster its financial infrastructure and credibility in embracing digital assets. It remains to be seen whether these advancements will sustain Bahrain’s ambitious drive towards becoming a formidable financial force in the Middle East.
In the final analysis, the emerging alliance between Bahrain’s Bank ABC and JPMorgan symbolizes a stride forward for blockchain adoption in international finance. Nevertheless, it also provides a clear illustration that blockchain technology’s integration into the corporate world needs to be cautious and mindful of potential pitfalls.
Source: Cointelegraph
