Blockchain and digital currencies got a big boost in Asia’s financial community today, as South Asia’s largest bank embraced a JPMorgan blockchain project while a digital currency project launched by Hong Kong got some big supporters.
The State Bank of India, which manages nearly a quarter of the nation’s assets as well as its loan and deposits market, decided to join JPMorgan’s blockchain payments system.
According to a Feb. 23 report by Indian news outlet Indiatimes, the State Bank of India — a nationally owned retail bank—will use JPMorgan’s Liink blockchain system to make its cross border-payments faster and cheaper.
“We are excited to be the first bank in India to go live on the network,” said Venkat Nageswar, the bank’s deputy managing director for international banking. He added that the bank is looking “forward to closer partnership with JPMorgan on implementation and exploring applications as part of the network to better serve our clients.”
India’s financial authorities’ interest in blockchain technology stands in sharp contrast to the government’s view on private cryptocurrencies. On Feb. 5, India’s central bank, the Reserve Bank of India, said it is close to deciding on whether to launch a central bank digital currency. Interest in a digital rupee doesn’t extend to individual ownership of digital assets, however. The country is in the process of passing a ban on crypto ownership.
A multinational CBDC
According to another Feb. 23 announcement, the Hong Kong Monetary Authority is teaming up with the Bank of Thailand, the Central Bank of the United Arab Emirates, and the Digital Currency Institute of the People’s Bank of China to participate in a second phase test of a multinational central bank digital currency (CBDC) project intended to facilitate cross-border payments.
The CBDC project is “strongly supported” by the Bank for International Settlements’ (BIS) Innovation Hub Centre in Hong Kong, according to the announcement. The newly renamed Multiple Central Bank Digital Currency (m-CBDC) Bridge will see participants develop a proof-of-concept prototype for a faster and cheaper way to process payments across borders at any time of day.
Blockchain technology has been touted as a solution to the slow and pricey interbank—and international—transaction confirmation system that is standard in traditional finance. It is an issue that a number of private crypto developers have targeted, among them Ripple and the Facebook-founded Diem stablecoin project, formerly known as Libra.