Real-Time USD Transfers for Indian Banks
Kinexys, JPMorgan’s rebranded digital assets unit, has partnered with India’s Axis Bank to enable commercial clients of the bank to send and receive USD transfers in real-time both domestically and cross-border.
According to Reuters, this service will be the first of its kind for organizations in India. Two significant benefits include greater flexibility and increased liquidity due to instant settlement.
How This Capability Works
Naveen Mallela, Global Co-Head at Kinexys, provided an example of how real-time USD payments can be beneficial. Companies in India could make dollar payments to Middle Eastern organizations on Sundays, which are workdays in the region.
Origin of Kinexys
Kinexys began as Onyx, one of the world’s first bank-operated blockchains. JPMorgan rebranded the platform last year with the objective to drive on-chain foreign exchange conversions. The program initially focused on facilitating real-time dollar-to-euro conversions.
This solution is in high demand due to the increasing need for cross-border payments and persistent issues related to currency conversions, including their cost and inefficiency.
Need for Instant Settlement
Joel Hugentobler, a Cryptocurrency Analyst at Javelin Strategy & Research, highlighted the importance of this solution. He stated that 24/7 instant settlement has been much needed in the forex market, one of the largest and most liquid markets globally.” This will help reduce counterparty risk in multi-bank transactions and provide greater transparency to participants.
Cross-Border Payment Ecosystem
The unique demands of cross-border payments have sparked speculation about which payment rail might eventually become the platform of choice. Cryptocurrencies are appealing due to their decentralized nature but can be volatile and impractical for many use cases.
Stablecoins, designed to track fiat currencies, have emerged as a leading contender in this space. Additionally, global networks operated by credit card companies like Visa and Mastercard could serve this purpose. Global messaging networks such as SWIFT and SEPA are also potential solutions.
Given the variety of offerings, it is likely that multiple platforms will coexist in the global payments landscape.
Future of Kinexys
Mallela noted that Our work with Axis Bank marks the next step in creating a growing industry-wide blockchain-based financial ecosystem, with interoperability among central bank digital currencies, stablecoins and other digital currency solutions.”
