JPMorgan Collaborates with Indian Banks to Launch Blockchain-Based Dollar Settlement System, Reported Bloomberg

JPMorgan Chase & Co., the American multinational investment bank, has formed an alliance with six Indian banks to inaugurate a blockchain-based platform that will handle interbank dollar transactions within India’s emerging International Financial Centre. This development, initially reported by Bloomberg, showcases the evolving landscape of financial technology (fintech) in India.

Kaustubh Kulkarni, JPMorgan’s Senior Officer in charge of Indian operations and Vice Chairman for the Asia-Pacific region, indicated that the project would enter a pilot phase in the upcoming months. This period is crucial for gauging the experience and adaptability of the participating banks, which include private sector entities like HDFC Bank Ltd., ICICI Bank Ltd., Axis Bank Ltd., Yes Bank Ltd., IndusInd Bank Ltd., and also JPMorgan’s banking division in GIFT City.

Upon obtaining approval from the International Financial Services Centre Authority, the pilot project will commence this coming Monday, utilizing JPMorgan’s proprietary blockchain platform, Onyx.

The present settlement system poses certain challenges, including potential delays that could stretch to several hours for settlement completion. Moreover, transactions are currently not processed on Saturdays, Sundays, or public holidays. The introduction of a real-time, blockchain-supported system has the potential to eliminate these constraints, offering round-the-clock transactional availability – a significant improvement in efficiency and convenience for the banking sector.

This pioneering initiative further propels the Indian government’s efforts to establish Gujarat International Finance tech -City (GIFT City) as an influential trading center. It echoes the ambition to compete with well-known international hubs like Singapore and Dubai, underlining India’s commitment to becoming a significant player in the global fintech arena.


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Investors Flock to US Money Market Funds Amid Banking Crisis

As the global banking crisis continues to fuel concerns among investors, the popularity of US money market funds is surging. According to Emerging Portfolio Fund Research (EPFR) data obtained by the Financial Times, more than $286 billion has been invested in these funds so far in March. The inflows are the highest seen in a month since the emergence of the Covid-19 pandemic.

The top beneficiaries of this trend are Goldman Sachs, JPMorgan Chase, and Fidelity. The figures show that Goldman Sachs’ money funds have grown by 13%, receiving $52 billion in investment. JPMorgan’s funds have seen inflows of nearly $46 billion, while Fidelity has enjoyed nearly $37 billion in investment. These funds are offering their best yields in years, as the US Federal Reserve continues to raise interest rates in a bid to curb inflation.

Money market funds are a popular choice for investors during uncertain times because they offer high liquidity and low risk. The current crisis in the banking sector has only served to amplify these qualities. The fear of liquidity constraints and potential bank failures has caused many investors to seek out safer investments, and US money market funds are delivering the kind of stability that investors crave.

In the seven days leading up to March 22, total money market fund assets increased by $117.42 billion to $5.13 trillion, according to a report from the Investment Company Institute. Government funds increased by $131.84 billion, while prime funds decreased by $10.83 billion. Tax-exempt money market funds shrank by $3.61 billion.

The influx of cash into money market funds is driven by fears surrounding the health of the financial system. Banks in the US and Europe are facing liquidity constraints as monetary policy tightens, and investors are wary of the potential risks associated with these developments.

For example, on March 24, shares of Deutsche Bank dropped due to an increase in the cost of insuring against its potential default risk. The bank’s five-year credit default swaps (CDS) climbed 19 basis points from the previous day, closing at 222 bps, according to Reuters, citing S&P Global Market Intelligence data. Meanwhile, in the US, there is still uncertainty surrounding regional banks, as insurance on default for financial services firms Charles Schwab and Capital One soared last week. The latest data shows that credit default swaps jumped over 80% to 103 bps as of March 20.

The surge in popularity of money market funds underscores the ongoing concerns of investors in the face of a global banking crisis. With interest rates continuing to rise, and fears of liquidity constraints and bank failures mounting, it seems likely that this trend will continue in the months ahead.


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Deposit Coins May Be the Best Blockchain Option for Commercial Banking

JPMorgan Chase and Oliver Wyman, which is a corporation that specializes in consulting, worked together to do research on the potential applications of blockchain technology in commercial banking. The subsequent steps were for the two businesses to publish their findings in a report on February 9th, which was then made available to the entire public. On the other hand, the writers make it a point to underline the advantages given by deposit coins in terms of their dependability and stability. They say this as a point of differentiation between deposit coins and other cryptocurrencies. The authors highlight the benefits that may be obtained by using deposit coins, despite the fact that stablecoins and central bank digital currencies (CBDCs) have been the market leaders up until this point in time. Despite the fact that deposit coins could be utilized instead, this is still the case.

A depository institution will issue deposit tokens on a blockchain in order to guarantee that an accurate record of a deposit claim that has been made can be preserved. This will be done in order to ensure that an accurate record of a deposit claim that has been made can be maintained. Stablecoins and CBDCs, on the other hand, are often issued by a private company rather than a financial institution such as a bank. This stands in stark contrast to all that was just discussed. The fact that the issuer does not conform to the typical sort of financial institution is something that may work out to the issuer’s favor in a significant way. “Given that deposit tokens are commercial bank money embodied in a new technical form, they sit comfortably as part of the banking ecosystem, subject to regulation and supervision applicable to commercial banks today.”

The authors of the research note that regulation contributes to the development of trust, reduces the likelihood of a run on deposit tokens, and guarantees dependability all at the same time.


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Jpmorgan Chase Adopts Blockchain for Collateral Settlement

Financial tycoon, JPMorgan Chase (JPM), announced to use of blockchain technology in the collateral settlement, planning to expand to other asset types such as equities and fixed income, according to Bloomberg.

JPMorgan Chase used cryptocurrency tokens for collateral in traditional financial asset transactions for the first time on May 20.

Two of the bank’s entities are using tokens of BlackRock money market fund shares as collateral on their private blockchains, allowing trading outside of market hours.

Ben Challice, JPMorgan’s global head of trading services commented that:

“What we’ve achieved is the friction-less transfer of collateral assets on an instantaneous basis, they have been heavily involved since Day One, and are exploring use of this technology.”

To date, the bank has processed more than $300 billion in repo transactions using blockchain.

In addition to being used for derivatives and repo transactions and securities lending and other transactions, a blockchain-based collateral settlement will also expand the application scope of tokenized collateral, providing investors with a wider variety of assets to invest as collateral.

Intraday repurchases or repo refer to short-term borrowings with fixed income.

JP Morgan Chase, Ciena, and Toshiba announced to conduct research on a Quantum Key Distribution (QKD) system in groundbreaking research for better protection for blockchain networks from eavesdropping and quantum computing attacks.

JP Morgan has been crafting a name for itself in the blockchain/crypto space. For instance, it created a business unit dubbed Onyx to house its digital currency and blockchain efforts.

The leading bank also recently set foot in the metaverse through a virtual lounge.

Image source: Shutterstock


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JPMorgan Conducts Strategic Investment to Blockchain Firm TRM Labs, Expanding Crypto Business

On Monday, financial tycoon JPMorgan Chase (JPM) said it is making a “strategic investment” in San Francisco-based blockchain intelligence platform TRM Labs.

TRM Labs integrates more than a dozen blockchains, aiming to utilize blockchain technology to detect signs of financial crimes, such as fraud and money laundering, in real-time and help financial institutions, cryptocurrency companies, and public institutions deal with corresponding risk management.

TRM said its Labs’ products would help demonstrate the transparency of blockchain transactions, helping clients reduce risk and meet anti-money laundering (AML) regulatory requirements.

The company also offers forensics-focused products that enable law enforcement to investigate specific crimes such as theft or fraud originating from the blockchain.

Esteban Castano, co-founder and CEO of TRM, said in a statement:

“The JPMorgan investment clearly highlights the significance of the growing crypto economy and the importance of building trust and safety in this ecosystem to sustain its growth,”

Umar Farooq, CEO of Onyx, JPMorgan’s wholesale payments blockchain platform, echoed this:

“leading infrastructure companies like TRM will help usher in the future of secure blockchain and crypto use cases.”

These investment activities are well enough to show the importance of fraud detection in the emerging encryption industry.

San Francisco-based blockchain intelligence platform TRM Labs announced the company had completed a series A funding with a total value of $14 million on June 17.

The A-Round was led by Bessemer Venture Partners, a venture capital firm with 130 IPOs. The well-known digital payment company PayPal and the cloud-based software company Salesforce also contributed to this financing.

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JPMorgan Pegs Bitcoin ‘Fair Value’ at $38,000, despite $44K on the Horizon

Analysts from American multinational investment bank, JPMorgan Chase & Co have placed the “Fair Value” of Bitcoin (BTC), the world’s first cryptocurrency at $38,000. 


The projection of the fair value of the premier digital currency came despite the current price of BTC trading more than 10% from the set price, however, the analysts, led by Nikolaos Panigirtzoglou, ascertained that the fair value was estimated based on the extreme volatility of the digital asset which they say is about four times as high as that of Gold.

Bitcoins opened the year to a very bearish run, with prices falling massively on a continuous run from the All-Time High (ATH) above $68,000 back in November to a low of $33,184.06 in January. 

However, renewed investor sentiments in the traditional markets have had a significant rub off on Bitcoin as it has been on an uptrend for the better part of February. The price of BTC at the time of writing was hovering around $44,076.25 to $44,500 as it looks to break through the $45,000 resistance.

These impressive price runs seem not to have impressed Panigirtzoglou and his team who suggested that the “fair value” of Bitcoin would rise to $50,000 in a scenario where the volatility level narrows to three times, a possibility that seems impossible, at least, in the near term.

With more funds injected to acquire Bitcoin, the cryptocurrency is poised to stabilize over time, but the analysts pointed out that the step back amongst institutional investors seen in the BTC ecosystem is fueled by the fears in the volatility of the cryptocurrency.

“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” they wrote.

Despite the bearish fair value estimation the analysts pointed at, JPMorgan still maintains a bullish price target of $150,000, up from the projected $146,000 estimated back in January 2021.

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JPMorgan estimates ‘fair value’ of Bitcoin at $38K

Amid Bitcoin (BTC) posting a significant price recovery since early February, JPMorgan analysts suggested that the “fair value” of BTC is actually lower than its market price on Tuesday.

The current fair-value level for BTC is around $38,000, JPMorgan strategists said in the bank’s latest investor note published on Tuesday. Led by JPMorgan crypto market analyst Nikolaos Panigirtzoglou, the strategists estimated the “fair value” based on Bitcoin being nearly four times as volatile as gold.

The “fair value” of Bitcoin would rise to $50,000 in a scenario where the volatility level narrows to three times, the strategists suggested, adding:

“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption.”

At the time of writing, BTC traded around $43,000, or 12% up from the “fair value” suggested by JPMorgan. Bitcoin previously was inching close to $45,000, reaching around $44,900 on Tuesday, according to data from CoinGecko.

While being bearish on Bitcoin’s current “fair value,” JPMorgan’s strategists still forecast that BTC would surge far above $100,000 one day. According to the report, Panigirtzoglou’s long-term theoretical target for Bitcoin stands at $150,000, up from $146,000 forecasted in January 2021.

Related: Wall Street still not convinced on Bitcoin $100K this year: JPMorgan survey

JPMorgan’s analysts also noted that Bitcoin’s price correction in January looks “less like a capitulation” than the one recorded in May 2021, when BTC plummeted 50% from above $60,000 to around $33,000. However, some BTC metrics like futures open interest and reserves on exchanges are pointing to a “more long-standing and thus more worrisome position reduction trend” that began in November, the strategists reportedly added.

The strategists previously released a similar report in November, asserting that Bitcoin’s “fair value” was around $35,000, or about 45% lower than its market price of $63,281.