JPMorgan Launches Instant Dollar-Euro Foreign Exchange Settlement on Blockchain

JPMorgan has announced a significant enhancement to its recently rebranded blockchain platform, which will integrate Kinexys Digital Payments with JPMorgan’s foreign exchange (FX) services. Consequently, the company will enable the settlement of on-chain foreign exchange (FX).

Kinexys CEO Umar Farooq made the announcement at the Singapore Fintech Festival on Wednesday. As part of this rebrand, all JPMorgan blockchain units covering information, money, and assets will adopt the Kinexys name.

This move positions Kinexys as a key player in the area of digital cross-border payments and foreign exchange.

JPMorgan’s Kinexys Platform Debuts Dollar-Euro FX Settlement

Initially supporting only USD and EUR, the institution has plans to expand the technology to other currencies later on. This integration will allow clients to execute near real-time FX transactions and settlements via the JPMorgan global FX platform.

This is expected to significantly reduce FX settlement risks and accelerate trade settlements. Since launching, Onyx, now renamed Kinexys, has seen impressive growth, processing over $1.5 trillion in transaction volume with an average of $2 billion daily.

“Soon, we’ll be adding foreign exchange (FX) capabilities to Kinexys Digital Payments, formerly JPM Coin System. We’ve also announced a proof-of-concept (POC) from Kinexys Digital Assets and Kinexys Labs. This POC demonstrates on-chain privacy, identity and composability—major themes that will play significantly into our continued evolution,” the company said in a press statement.

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Over the past year, transaction volume has grown tenfold. This volume was driven by cross-border payment capabilities that allow funds to move seamlessly across global markets, even outside traditional banking hours.

Beyond FX settlement, Kinexys will continue to provide solutions for corporations, financial institutions, and FinTechs. By mid-October 2023, JPM Coin System, now Kinexys Digital Payments, which is pegged to the US dollar, reached the $1 billion mark in processed daily transactions.

JPMorgan followed up its announcement with a whitepaper detailing a proof-of-concept. It explores how blockchain technology can enhance privacy, identity, and composability within financial systems.

JPMorgan’s Contributions to the Space

In May, JPMorgan teamed up with Mastercard, Visa, and Citigroup to test financial markets with distributed ledger solutions. Consequently, the financial giants united to launch the Regulated Settlement Network (RSN).

The RSN integrates commercial bank money with wholesale central bank funds and various securities, including US Treasuries and investment-grade debt. By facilitating settlements in US dollars, the project tested the feasibility of a more interconnected financial ecosystem with distributed ledger technology and was endorsed by the New York Innovation Center of the Federal Reserve Bank of New York.

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In the same month, the bank disclosed its ETF holdings. Moreover, in June, Fidelity International announced that it joined JPMorgan’s tokenized network, marking a significant milestone. This collaboration highlights the increasing interest in leveraging blockchain for real-world applications.