After two years of experiments, JPMorgan and the Bahraini bank will offer U.S. dollar payment settlement in several countries, with plans to expand to euro service as well.
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Bahrain-based Bank ABC will use JPMorgan’s Onyx Coin Systems for blockchain-based cross-border payments in a soft, or limited, launch. The new service will be more cost effective and reduce settlement times relative to traditional solutions.
Bank ABC will at first use the U.S. dollar in transactions involving Bahrain, the United States, United Kingdom, Singapore and Hong Kong. The partners are planning more locations and transactions with the euro as well. Programmable payments are also in the works.
The service has been launched after two years of experiments. Global head of Onyx Coin Systems Naveen Mallela said in a statement:
“This enables cross-border commercial transactions to be executed between Bahrain and US corridors instantly, atomically and with certainty.”
The new service was developed in close collaboration with the Central Bank of Bahrain (CBB). The CBB supervised a trial in January 2022 in which JPM Coin was used to settle payments between the national Aluminium Bahrain and its U.S. counterparties through Bank ABC.
Related: JPMorgan sees advantages in deposit tokens over stablecoins for commercial bank blockchains
Bank ABC has the first partnership with JPMorgan’s blockchain service in the Middle East, according to the statement. Earlier this year, Onyx linked up with six Indian banks in a pilot project to offer USD settlement. It also partnered with the German Siemens conglomerate for settlement in euros. JPM Coin was launched in 2020.
Bahrain has been taking steps to modernize its financial system in recent years. Binance received a license in the kingdom in March 2022, beating Dubai as the first member of the Cooperation Council for the Arab States of the Gulf to license an international crypto exchange by a few days. Binance partnered with EazyPay to provide retail payment services in Bahrain, although it is not clear whether that service is still available.
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