The central bank of Bahrain and JP Morgan are going to work on a digital currency settlement pilot. Bahrain’s Central Bank expects digital currency collaboration to happen with JP Morgan and Bank ABC to extend to a CBDC.
Moreover, Bahrain is the third most prosperous Arab country. The central bank of Bahrain officially announced on Tuesday that the bank is collaborating with JP Morgan. In addition, there is a collaboration plan with Arab banking corporation BSC or Bank ABC in a pilot scheme.
The collaboration is to introduce an instant cross-border payment solution that is based on digital currency technology.
The new digital currency pilot will involve transferring funds from and to Bahrain in US dollars. This applies to all the payments from the buyers and suppliers. This helps to cut the settlement processing time.
Inefficiencies and Pain points
Rasheed AI-Maraj is the CBB Governor. He said that through this pilot program with JP Morgan and Bank ABC, they aspire to address the inefficiencies and pain points. These points exist today in the traditional cross-border payments arena.
Ali Moosa is the JP Morgan vice-chair for wholesale payments. Moreover, he notes that this new collaboration involves the company’s digital currency-focused division known as Onyx. The product was piloted in 2017 and was initially referred to as the interbank Information Network. However, in October 2020, the product got rebranded again.