Bahrain is the latest country to explore blockchain technology by US investment bank JPMorgan, the country’s central bank testing JPMorgan’s proprietary digital currency.
The Central Bank of Bahrain (CBB) has successfully completed a digital payment test in conjunction with JPMorgan’s blockchain and cryptocurrency unit Onyx, according to an official announcement released on January 6.
The trial involved two other large institutions, the Manama-based international bank, Bank ABC, and Bahrain’s national aluminum smelter Aluminum Bahrain, also known as Alba. The test allowed Bank ABC to settle payments in real time to Alba’s counterparts in the United States using JPM Coin, a blockchain-based payment system and a stablecoin indexed to the US dollar.
According to the announcement, the CBB was responsible for overseeing the trial.
CBB Governor Rasheed Al Maraj said the lawsuit has been crucial for the Bahraini government to address and potentially eliminate existing inefficiencies in the traditional cross-border payments industry.
“We are pleased to announce the success of this test, which is in line with our vision and strategy to develop and enrich the capabilities provided to stakeholders in the financial services sector in the Kingdom using emerging and pioneering technologies. “said Al Maraj.
The CBB previously disclosed its intention to test JPM Coin in May 2021, saying the trial could potentially expand into the development of its central bank digital currency.
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Originally announced in 2019, JPM Coin launched commercially in October 2020.
The investment bank has actively promoted its blockchain technology for global use, partnering with Singapore’s largest bank, DBS, to pilot a blockchain payment system. JPMorgan previously supplied its Liink blockchain technology to the State Bank of India to reduce transaction costs and improve cross-border payments.