Bahrain-based Bank ABC is set to revolutionize cross-border payments by partnering with JPMorgan’s Onyx Coin Systems for blockchain-based transactions. This strategic collaboration aims to enhance efficiency, reduce costs, and accelerate settlement times compared to traditional methods.
Expanding Cross-Border Payments
Initially, Bank ABC will employ the U.S. dollar for transactions involving Bahrain, the United States, the United Kingdom, Singapore, and Hong Kong. There are plans to expand the service to include euro transactions in the future. Furthermore, the partners are exploring programmable payments, adding a layer of versatility to their offering.
The launch of this innovative cross-border payment service follows two years of rigorous experimentation. Naveen Mallela, Global Head of Onyx Coin Systems, highlighted the significance of this development, emphasizing that it allows “cross-border commercial transactions to be executed between Bahrain and US corridors instantly, atomically, and with certainty.”
Collaboration with the Central Bank of Bahrain (CBB)
The Central Bank of Bahrain (CBB) played a pivotal role in developing this groundbreaking service. In January 2022, the CBB oversaw a trial in which JPM Coin was used to settle payments between national Aluminum Bahrain and its U.S. counterparts through Bank ABC. This partnership signifies Bank ABC’s status as the first Middle Eastern institution to collaborate with JPMorgan’s blockchain service.
Onyx has been actively forging partnerships to expand its reach and offer innovative settlement solutions. Earlier this year, it initiated a pilot project with six Indian banks to provide USD settlement services. Additionally, Onyx partnered with the German conglomerate Siemens for euro settlements. JPM Coin, the foundation of these initiatives, was launched in 2020.
Bahrain’s Modernization in Financial Services
Bahrain has been on a trajectory to modernize its financial sector, embracing innovations like cryptocurrency and blockchain technology. In March 2022, Binance secured a license in Bahrain, becoming the first member of the Cooperation Council for the Arab States of the Gulf to license an international crypto exchange. Binance also teamed up with EazyPay to offer retail payment services in Bahrain, reflecting the kingdom’s commitment to fostering financial innovation.