The Central Bank of Bahrain is to use JPMorgan's blockchain platform Onyx in a pilot scheme to introduce instantaneous cross border payment using a digital currency.
Bank ABC along with JPMorgan will pilot the transferring of funds from and to the Kingdom of Bahrain using digital dollars, with the aim of speeding up payments and settlement between buyers to suppliers.
The central bank says it will act as a close partner in the pilot trials and would look to extend the collaboration to Central Bank Digital Currencies (CBDCs).
H.E. Rasheed Al-Maraj, governor of the Central Bank of Bahrain, states: “Through this pilot with JPMorgan and Bank ABC, we aspire to address the inefficiencies and pain-points which exist today in the traditional cross-border payments arena”.
JPMorgan last month formed a joint venture with DBS, Bank and Temeasek in Singapore that will use Onyx to challenge the cumbersome hub-and-spoke model applied to traditional cross-border payment flow.
The new venture, dubbed Partior, has it roots in project Ubin, a blockchain-based protytpe for multi-currency payments developed by the Monetary Authority of Singapore in partnership with JPMorgan and Temasek.
The commercial applications of the payments network include cross-border payments in multiple currencies, foreign currency exchange, settlement of foreign currency denominated securities, as well as integration with other blockchain-based platforms.
Speaking of the extension of the platform to the Middle East, Ali Moosa, vice chairman of wholesale payments at JPMorgan, states: “JPMorgan Onyx has been setup with the mandate to lead the buildout of next generation clearing and settlement infrastructures and we are delighted to partner with a leading central bank and regulator like the CBB and an innovation-focused partner like Bank ABC."