JPMorgan to Offer Instant Dollar-Euro Settlement via Blockchain Platform

JPMorgan Chase, the largest U.S. bank, said it will soon offer instant settlement for foreign exchange between the U.S. dollar and the euro through its Kinexys blockchain platform, and plans to add the British pound to the service over time.

According to interviews with executives at the U.S.-based bank and a statement released Wednesday, the system will utilize JPM Coin tokenized deposits native to Kinexys, which is capable of processing more than $2 billion in transactions per day.

Naveen Mallela, global co-head of JPMorgan's digital ledger Kinexys (formerly known as Onyx), said, "If you look at JPM Coin, you'll see that we're generating revenue from fees, but also from the liquidity generated from holding these balances. We are finding a third revenue stream from FX spreads."

JPM Coin currently offers dollar- and euro-denominated payments to participating institutions via the private blockchain Kinexys. The initiative is one of the few examples of a large-scale deployment of a digital ledger by a major bank, but the scale it handles is still small compared to JPMorgan Chase's $10 trillion in daily transaction volume.

The upcoming feature will enable instant settlement between the US dollar and the euro. According to the bank, the British pound will be included once it is approved. Depending on the currency pair, traditional foreign exchange settlement times range from the same day to a maximum of two days.

The instant settlement service will help the world's largest payments provider attract more customers, including fintech companies, and bring the blockchain project closer to break-even, Malera said in an interview.

Umar Farooq, global co-head of JPMorgan's payments business, said in an interview that balancing costs and revenues could take another three to five years. Onyx was rebranded as Kinexys in part to become less "mysterious," he said.

Farouk said the number of transactions on Kinexys has increased 10-fold year-over-year. "We could increase it another 10 times and be fine," he said. "We just want to make sure the platform shows that it can work at scale now."

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