According to Bloomberg, JPMorgan Chase & Co. will soon provide real-time settlement of foreign exchange between the U.S. dollar and the euro through its blockchain platform Kinexys (formerly known as Onyx), and plans to gradually add pounds to the service in the future. middle.
JPMorgan Chase said in a statement that through Kinexys solutions, enterprises, financial institutions and fintech companies can simplify the flow of funds, improve asset settlement times, free up liquidity and create new revenue opportunities. The system will tokenize deposits using JPM Coin, which is native to the Kinexys platform, which processes more than $2 billion in transactions daily.
'By observing the operation of JPM Coin, we generate revenue from transaction fees and also from the liquidity of holding these balances,' said Naveen Mallela, co-head of JPMorgan Kinexys Digital Ledger Global. 'We are creating a third source of income through the foreign exchange spread.'
JPM Coin currently provides payment convenience in USD and EUR to participating institutions through the private blockchain Kinexys. This initiative is one of the few cases of digital ledger deployment scaled by large banks, but it still only handles a small portion of the $10 trillion JPMorgan transfers daily.
The goal is to ensure that the new system can operate at scale.
According to the statement, the 'Kinexys Digital Payments' system is currently integrating with JPMorgan's foreign exchange services to achieve on-chain foreign exchange settlement, initially supporting USD and EUR settlements, with plans to expand to more currencies. Bank clients will be able to 'execute near-instant foreign exchange transactions and settlements through the connection to JPMorgan's global foreign exchange platform' as early as the first quarter of 2025, thereby reducing foreign exchange settlement risks and speeding up transaction settlement times. Traditional foreign exchange settlement times can vary from same-day to two days depending on the currency pair.
Mallela stated in an interview that this instant settlement service will help the world's largest payment service provider attract more clients, including fintech companies, and bring this blockchain project closer to breaking even. Umar Farooq, co-head of JPMorgan Payments Global, noted that breaking even may still take three to five more years.
Farooq stated that the number of transactions on the Kinexys platform is growing tenfold each year, 'We can grow another 10 times; that's not a problem. We just want to ensure that this platform shows it can operate at scale now.'
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