QNB Group has moved its US dollar corporate payment operations to a blockchain-based platform operated by JPMorgan Chase, marking another step forward in how big banks are starting to use the technology behind digital currencies for everyday transactions.
The Qatar-headquartered bank announced Monday that it now uses JPMorgan’s Kinexys Digital Payments system to handle dollar payments for business customers in Qatar. The new setup lets payments go through in minutes at any time of the day, including weekends.
Traditional banking systems mostly work during business hours and can take several days for money to reach its destination. Kamel Moris, who leads transactional banking at QNB, said business managers increasingly want their money to move as quickly as information does.
The bank can now promise payments will clear in as little as two minutes around the clock. “It’s a treasurer’s dream,” Moris said during an interview as quoted by Bloomberg.
Big banks worldwide are adding distributed ledger technology to their operations, seeing it as a way to make complicated back-office work simpler.
Despite testing these systems for over ten years, most banks haven’t gotten them to work at large scale or make money from them yet.
JPMorgan’s blockchain network handles $3 billion daily
JPMorgan launched the Kinexys network in 2019. It now processes $3 billion in transactions daily.
That sounds substantial, but it represents just a small slice of the roughly $10 trillion the bank’s payment operations handle every day.
As the biggest US dollar clearing bank globally, JPMorgan wants to grow the platform by tapping into its extensive correspondent banking network.
Opening the network to other financial institutions lets JPMorgan reach companies that don’t bank directly with them, according to Naveen Mallela, who runs Kinexys alongside another executive. “This is institutional-grade scale,” Mallela said.
As reported by Cryptopolitan Swift is also running its own blockchain tests. The messaging network that connects more than 11,000 banks is checking whether its core system could eventually operate on blockchain technology. BNP Paribas, BNY Mellon and other major banks are participating in the trial.
Results from the Swift pilot won’t come for months. One banker working on it called the project “an important technological transformation for the international interbank payments industry.” The development was first reported by Grégory Raymond of The Big Whale on X.
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Source: https://www.cryptopolitan.com/middle-east-bank-switches-to-blockchain/
