Focus Area:
Address inefficiencies in international payments using digital currency
Overview:
Central Bank of Bahrain collaborated with J P Morgan and Bank ABC in a pilot scheme to introduce instantaneous cross border payment solution leveraging state of the art technology and digital currency. Bank ABC and J.P. Morgan conducted a pilot to facilitate the transfer of funds between the Kingdom of Bahrain and the United States in US Dollars. The aim was to expedite payments from buyers to suppliers, resulting in faster supplier payments and shorter payment initiation times for buyers, eliminating the requirement of pre-funding.
Motivations:
Address the inefficiencies and pain-points which exist today in the traditional cross-border payments.
Financial institutions involved:
Central Bank of Bahrain(CBB)
Arab Banking Corporation(ABC)
Technology & Stakeholders:
JP Morgan
Aluminium Bahrain (ALBA)
Technical Solution:
J.P. Morgan’s ONYX solution was used to lead the buildout of a next generation payment and settlement infrastructure for Bahrain. It is a permissioned system that serves as a payment rail and deposit account ledger, enabling participating entities to transfer US Dollars held on deposit with J.P. Morgan.
Conclusion:
The settlement time was reduced from few days to few minutes.
Source: