What Impact Will JPMorgan Onyx Blockchain Have On Crypto and The Dollar?

Financial institutions such as banks have shown great interest in cryptocurrencies and blockchain technology, however, in some countries, state-ruled restrictions haven't quite allowed these institutions to indulge in crypto services.

That said, in countries where laws are not currently prohibiting, many banking institutions have taken steps to adopt the new face of Fintech, cryptocurrency and blockchain technology. Amongst these institutions is JPMorgan Chase, the largest American Bank with a balance sheet of over $3.31 Trillion. JPMorgan has been developing a wholesale payment infrastructure that leverages blockchain technology to facilitate transactions across the globe. At the time, it is reported that over $700 billion in short-term loans has been processed via the JPMorgan Onyx Blockchain. Onyx was developed in 2020 with the major focus being on the tokenization of traditional assets and therefore giving these secondary markets assets more utility and streams to generate income.

On the topic of tokenization, we've talked a bit about how this could change how we see assets and also how we use them, a system this flexible largely allows markets such as the stocks market to tap into the crypto economy, deepening liquidity and creating cross-platform value flow. JPMorgan clearly understands this and has taken steps to ensure that it is on top of its game as crypto gains more exposure and blockchain technology becomes more widely leveraged for products and business building and management.

On recent reports, JPMorgan has tied up with 6 Indian major banks to bring ease to the facilitation of interbank dollar transactions on its blockchain Onyx. This move would largely change how trades are settled within India as trade settlements would normally take an extended period of time to attain finality whereas, with blockchain technology, these trades can be processed instantly irrespective of whether or not these transactions are made on business days or not.

The partnership looks to put India on some competitive grounds as this latest move is part of a broader effort to promote the growth of Gujarat International Finance Tec-City (GIFT City), a project by the Indian government to establish a competitive financial hub to rival global centres such as Singapore, Hong Kong, Abu Dhabi Global Market (ADGM), and Dubai’s International Financial Centre as reported on crypto.news

Kaustubh Kulkarni, the senior country officer for India and vice chairman of Asia Pacific at JPMorgan stated in an interview that the pilot project would commence in the coming months, during which the banks’ experiences will be analyzed.

The consortium of banks participating in this initiative includes esteemed private lenders in India such as HDFC, ICICI, Axis, Yes, IndusInd, and JPMorgan’s banking unit located within GIFT City.

The primary objective of JPMorgan’s partnership with these Indian banks is to leverage blockchain technology to expedite and streamline interbank dollar transactions.

This latest move is part of a broader effort to promote the growth of Gujarat International Finance Tec-City (GIFT City), a project by the Indian government to establish a competitive financial hub to rival global centres such as Singapore, Hong Kong, Abu Dhabi Global Market (ADGM), and Dubai’s International Financial Centre.

What Impact Will JPMorgan Onyx Blockchain Have On Crypto and The Dollar?

The very first face value of JPMorgan’s venture into blockchain technology and the leverage of tokenization to build a bridge between traditional finance and the cryptocurrency ecosystem is exposure.

These exposures are bound to draw more attention to cryptocurrency products and services which largely enable the market and industry to expand. The more traditional assets or fiat currencies are bridged either via tokenization or whatsoever, the deeper the value within the ecosystem becomes and that simply enables its build more flexibly and offer ease of cross-border transactions across numerous company's products and services.

In addition, the interoperability of crypto assets and traditional assets would cause the birth of cross-platform products or assets. With this, companies stand to gain access to a diverse medium for raising funds for the development of products and services which in turn has a great economic impact as more companies are able to build and expand so not only is more value being created, more jobs are being created along the line.

To the dollar, this deepens its strength and makes it increasingly valuable to both trade markets. Onyx may be a centralized blockchain, but it may just be a gateway for the expansion of the cryptocurrency economy.