JP Morgan has launched its blockchain-based bank account service, Kinexys Digital Payments (formerly JPM Coin), in a third currency, GBP. As a result, it can now provide 24/7 support for corporate payments and foreign exchange for dollars, euros and pounds. The first clients to use the sterling services in London are LSEG’s SwapAgent and commodities trader Trafigura.
Kinexys has processed more than $1.5 trillion in cumulative transactions across all its services which include payments, intraday repo, collateral management and other offerings. It now averages around $2 billion in transactions daily.
SwapAgent, the derivatives margin and settlement service that is part of LSEG’s LCH, will be using Kinexys Digital Payments via JP Morgan’s London subsidiary for its post trade services pilot, which is independent of the UK’s Digital Securities Sandbox. It will then consider a broader adoption of the service.
“Integrating the innovative Kinexys Digital Payments blockchain deposit accounts into our SwapAgent offerings could allow us to operate beyond traditional branch cut-off times and manage settlements in a programmable manner in the future,” said Nathan Ondyak, CEO at SwapAgent, part of the London Stock Exchange Group.
Trafigura is using Kinexys for 24/7 cross border payments between its New York, London and Singapore divisions. It plans to deploy programmable payments to sweep funds between the centers in near real time.
Payments for the Digital Securities Sandbox?
The timing of Kinexys Digital Payments’ launch in the UK coincides with the early stages of the Digital Securities Sandbox (DSS), a joint initiative from the Bank of England and the Financial Conduct Authority (FCA). We asked JP Morgan about its plans to get involved, but it declined to comment.
Potentially settlement of institutional transactions will be enabled with Fnality, the tokenized settlement solution that uses central bank money. But corporates and some non bank financial institutions may not have access to central bank money, so Kinexys could be one of the digital solutions that fills the need. Most of the UK’s largest banks are also working on the Regulated Liability Network, a tokenized deposit payment solution, but that’s not yet live.
