In March we reported that JP Morgan was planning a pilot project for blockchain-based bank accounts for US dollars at GIFT City in India, an international financial center. Bloomberg reported that the pilot program began today and will run for a few months, according to Kaustubh Kulkarni, a senior country officer at JP Morgan.

India is promoting Gujarat International Finance Tec-City, or GIFT City, as a competitor to Singapore and Dubai. The Reserve Bank of India recently opened its domestic non-deliverable forward market for currency derivatives to banks operating in International Financial Service Centers (IFSCs) such as GIFT City.

Dollar rupee currency contracts must be settled in dollars, which would generally only happen during US bank opening hours.

However, JP Morgan clients with an Onyx JPM Coin bank account can make transactions 24/7. Therefore, the five Indian banks within GIFT City (HDFC Bank, ICICI Bank, Axis Bank, Yes Bank and IndusInd Bank) and JP Morgan are participating in the trial, which we understand is within a sandbox environment.

The Onyx JPM Coin solution only works for interbank payments where the other banks have Nostro accounts at JPMorgan, as in this case. JP Morgan also co-founded Partior, which focuses on wholesale cross-border payments using a blockchain infrastructure. Apart from JP Morgan, Partior also counts DBS Bank, Standard Chartered and SMBC as participants. And our sources claimed that Deutsche Bank has signed up or is close to signing up.