Building on its earlier participation in JPM Coin Systems through Onyx by J.P. Morgan, the firm’s blockchain business unit, First Abu Dhabi Bank (FAB) successfully completed its pilot using Programmable Payments.
Programmability is the ability of the system to execute specific tasks based on defined instructions. FAB became the first financial institution to complete the programmable payment pilot with JPM Coin, enabling payments to be triggered at specific times or events.
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This successful pilot opens up the possibility of a dynamic and automated funding and settlement solution to FAB and J.P. Morgan’s mutual clients. This solution will enable clients to benefit from Onyx’s real-time or event-based programmable capabilities.
FAB successfully completed time-based and threshold balance-based account funding into deposit accounts to execute a payment obligation
Unlike traditional cash concentration structures, which often lack real-time features or event-based configuration controlled by a bank, this delivers forward-looking possibilities where programmability can be used to provide flexibility to the client. Conditions for payment initiation and execution can be replicated on the bank’s side, resulting in improved execution response times with finality and traceability.
Banks, with their transaction data, are better positioned to build a wide range of programmable scenarios, including instructions within payments and obligation-linked payments that are settled in an all-or-none manner.
With programmable payments, treasurers can transition from cash forecasting to dynamic or just-in-time (JIT) funding 24/7, maximising yields on surplus cash and minimising fees and opportunity costs. Unexpected payment failures or drawing on credit lines can be minimised.
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By GlobalDataNaveen Mallela, Co-Head of Onyx by J.P. Morgan, said: “One of our foremost objectives has been to bring new and innovative digital solutions to our clients and the industry at large. We are delighted to work with the 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.”
