The government of Bahrain, the third largest Arab country, is partnering with the US investment bank JPMorgan Chase in a pilot project to settle digital currencies.
The Central Bank of Bahrain officially announced on Tuesday that the bank is currently partnering with JP Morgan and the Arab Banking Corporation BSC. Or Bank ABC, to pilot a solution for instant cross-border payments based on digital currency technology.
To speed up settlement processing times, a new digital currency pilot project will include transfer of funds to and from Bahrain in US dollars for payment from buyers and suppliers. The central bank confirmed that it could continue the project to expand cooperation with the central bank’s digital currency.
“With this pilot project with JP Morgan and Bank ABC, we want to address the shortcomings and challenges that exist in the traditional cross-border payments arena today,” said Rashid Al Maraj, Governor of the Central Bank of Bahrain.
Ali Musa, vice president of wholesale payments at JPMorgan, noted that the new partnership includes the company’s digital currency division known as Onyx. The product was tested in 2017 and originally called Interbank Information Network, it was renamed Liink in October 2020.
“JPMorgan Onyx was created with a mandate to lead the construction of the next generation of clearing and settlement infrastructure, and we are pleased to partner with a leading central bank and regulator such as BCB to lead the creation of next-generation payment and payment systems.” The Leader referred to the “settlement infrastructure”.
JPMorgan is actively promoting its blockchain expertise to partner with global jurisdictions for international payments. In late April, JPMorgan partnered with DBS, Singapore’s largest bank and state-owned investment firm Temasek, to launch a new blockchain initiative focused on global payments and interbank transactions. The bank previously supplied its Liink technology to a government-backed Indian bank to lower transaction costs and improve international payments.