Bahrain is the latest nation to explore blockchain technology by American investment bank JPMorgan, with the country’s central bank trialing JPMorgan’s proprietary digital currency.
The Central Bank of Bahrain (CBB) has successfully completed a digital payment test in collaboration with JPMorgan’s blockchain and cryptocurrency unit Onyx, according to an official announcement published on Jan. 6.
The trial involved two other major institutions, Manama-based international bank, Bank ABC, and Bahrain’s national aluminum smelter Aluminium Bahrain, also known as Alba. The test enabled Bank ABC to settle real-time payments to Alba’s counterparts in the United States using the JPM Coin, a blockchain-based payment system and stablecoin pegged to the U.S. dollar.
According to the announcement, the CBB was responsible for supervising the trial.
CBB governor Rasheed Al Maraj said that the trial has been crucial for the government of Bahrain 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,” Al Maraj said.
The CBB previously disclosed plans to test out the JPM Coin in May 2021, stating that the trial could potentially extend to its central bank digital currency development.
The investment bank has been actively promoting its blockchain tech for global use, partnering with Singapore’s largest bank, DBS, to pilot a blockchain payment system. JPMorgan previously provided its Liink blockchain technology to the State Bank of India to reduce transaction costs and improve cross-border payments.