The Central Bank of Bahrain recently announced that a trial of JP Morgan’s JPM Coin digital currency system had been completed successfully in collaboration with Onyx, according to media reports. First announced in May 2021, the tests involved commercial Bank ABC and its client Aluminium Bahrain (ALBA). ALBA utilised the enterprise blockchain system for real-time US Dollar payments with the US counterparties that are also JP Morgan bank account holders. The trial was overseen by the Bahrain Central bank.
Sael Al Waary, Deputy Group CEO of Bank ABC told the media, “The pilot was tested using US dollars, and this technology will allow us to scale up our existing offering and introduce more currencies in the future. We envisage major changes across the world with digital currencies, which will play a critical role in enabling future digital economies.
The JPM coin system tokenizes money that is present in JP Morgan bank accounts and is not a stablecoin. Digital currency payments are direct but that wouldn’t be needed with all parties banking at the same bank. With the currency becoming digital, it becomes programmable, giving corporates greater flexibility for the timing and conditions that trigger payments.
After the rests were first announced in May, the central bank announced that it would consider the system for central bank digital currency (CBDC) trials. Additionally, the central bank expressed satisfaction with the system’s ability to eliminate inefficiencies that exist with cross border. According to a recent research report from JP Morgan and Oliver Wyman, it predicted that CBDC could save $100 billion in cross border payment costs. JP Morgan’s Onyx was involved in a cross border CBDC trail between France and Singapore.