First Abu Dhabi Bank (FAB) has successfully conducted a pilot for programmable payments utilizing JP Morgan’s JPM Coin Blockchain Deposit Accounts.
Collaborating with JP Morgan’s blockchain division, Onyx, FAB implemented time-based and threshold balance-based funding into deposit accounts to fulfill payment obligations. This partnership enhances the potential for a dynamic and automated funding and settlement solution for their mutual clients.
FAB notes that traditional cash concentration structures often lack real-time features or event-based configurations that banks can control. In contrast, programmability offers clients increased flexibility. The conditions for payment initiation and execution can be replicated on the bank’s side, leading to improved response times along with finality and traceability.
Moreover, banks, with their comprehensive transaction data, are well-equipped to create a diverse range of programmable scenarios. This includes payment instructions and obligation-linked payments that are settled in an all-or-none manner.
With programmable payments, treasurers can shift from cash forecasting to dynamic or just-in-time funding around the clock, optimizing yields on surplus cash while minimizing fees and opportunity costs.
Naveen Mallela, co-head of Onyx by JP Morgan, expressed enthusiasm for the collaboration, stating, “We are delighted to work with FAB to extend our programmable payment offerings to multi-bank use cases. We believe that digital programmable ledgers will form the foundations for the finternet in the coming years.”