Instant Dollar-Euro FX Settlements: JPMorgan Leverages Blockchain for Faster Payments

• JPMorgan’s rebranded blockchain platform, Kinexys, has established a stronghold processing over $1.5 trillion in transactions, averaging $2 billion per day.
• The platform is set to expand its FX settlement capabilities and continue serving a diverse range of corporate and institutional clients.

JPMorgan Chase & Co. (JPM) has advanced its recently rebranded blockchain platform, Kinexys, by incorporating its digital payments and foreign exchange (FX) services. This move has enabled on-chain FX settlements for the first time on this platform. This announcement by Kinexys CEO Umar Farooq at the Singapore Fintech Festival captured the limelight.

Inside JPMorgan’s Latest Integration

The recent initiative introduces a new structure where all JPMorgan blockchain units related to data, finance, and assets will now operate under the Kinexys name. Initially focusing on dollar-euro transactions, Kinexys is positioned as a major player in the digital cross-border payments space.

The company plans to expand FX settlements to other currencies to improve transaction speed and settlement reliability. According to JPMorgan, clients will soon be able to process FX transactions nearly instantly through the bank’s global FX network. This should indeed reduce traditional FX settlement risks and shorten the timeline for trade finalizations. 

Over the past year, Kinexys has shown remarkable growth, with the platform handling more than $1.5 trillion in total transaction volume and averaging $2 billion per day. “Soon, we’ll be adding foreign exchange (FX) capabilities to Kinexys Digital Payments, formerly JPM Coin System,” said the company in a press release. Besides, the banking giant has been favoring Bitcoin amid rising geopolitical tensions, reported CNF. 

Beyond FX, Kinexys will remain engaged with a range of corporate and institutional clients. Thus, it will provide solutions for fintechs and financial services. The platform’s rebranding and expanded services reflect the bank’s commitment to blockchain-based solutions for global finance.

Moreover, it’s important to note that the Kinexys Digital Payments system, pegged to the U.S. dollar, reached a $1 billion daily transaction milestone in mid-October. Kinexys has also launched a proof-of-concept (POC) to showcase advanced blockchain functionalities like on-chain privacy and identity. 

This whitepaper explores “major themes that will play significantly into our continued evolution.” These include composability and identity verification within blockchain ecosystems. With the use of distributed ledger technology, this POC signals JPMorgan’s ambition to build a blockchain-based financial system, which enhances data privacy and interoperability.

Other Initiatives From the Banking Giant

Earlier this year, JPMorgan collaborated with Mastercard, Visa, and Citigroup in May. This collaboration was aimed at testing distributed ledger solutions, which led to the creation of the Regulated Settlement Network (RSN). The RSN links commercial bank deposits with central bank reserves and securities, including U.S. Treasuries and investment-grade assets, to facilitate settlements. 

In trials conducted in U.S. dollars, the RSN assessed the potential for distributed ledger technology to create a more interconnected financial system. Thus, this project received backing from the Federal Reserve Bank of New York’s New York Innovation Center.

Furthermore, the bank also disclosed its position in the newly launched spot Bitcoin ETFs, marking its entry into crypto ETF products. Thereafter, in June, JPMorgan welcomed Fidelity International onto its tokenized network, adding another major player to the bank’s blockchain initiative.