Mastercard and JPMorgan have partnered to create a new cross-border business-to-business payment solution, integrating Mastercard’s Multi-Token Network (MTN) with JPMorgan’s Kinexys Digital Payments. This collaboration enables mutual customers to settle transactions through a seamless integration of a single application programming interface (API).
By connecting MTN with Kinexys, the collaboration seeks to enhance payment availability, reduce “time zone friction,” and improve both transparency and settlement speed, ultimately streamlining cross-border transactions for businesses worldwide.
According to Naveen Mallela, co-head of Kinexys by JPMorgan, the integration is designed to enhance the value proposition of commercial transaction venues. Mallela explained that commercial bank payment rails, which can now be natively integrated into digital marketplaces and platforms, are a critical element in improving the efficiency of cross-border payments.
MTN, a blockchain-based payment solution developed by Mastercard, offers various tools that will work alongside the Kinexys Digital Payments platform to facilitate real-time transfers. Mastercard’s executive vice president of blockchain and digital assets, Raj Dhamodharan, shared his enthusiasm for the integration, stating, “For years, both Mastercard and Kinexys by J.P. Morgan have been committed to innovating for the future of digital asset and commercial infrastructure. We are excited about this integration and the new use cases it will bring to life.”
Kinexys Digital Payments
Kinexys Digital Payments was originally launched in 2020 under the name Onyx, a pioneering blockchain platform led by JPMorgan and powered by the bank’s dollar-pegged JPM Coin. Onyx was designed to handle cross-border transfers, and while JPM Coin initially faced skepticism from the broader crypto community, it quickly gained traction among financial institutions. Goldman Sachs was one of the first major institutions to adopt JPM Coin, followed by central and commercial banks in India and the Middle East.
In June 2023, JPMorgan expanded the platform’s reach by supporting euro-denominated payments. By October 2023, the platform had reached $1 billion in daily transactions, and by now, that figure has doubled, with $2 billion in daily transactions.
On November 6, JPMorgan rebranded Onyx to Kinexys, signaling the evolution of the platform. At the same time, JPMorgan announced plans to integrate Kinexys with its FX Services, enabling on-chain foreign exchange settlements, initially between the US dollar and the euro. Additionally, Kinexys released a white paper exploring a proof-of-concept for its on-chain enterprise privacy, identity, and composability features.
Mastercard’s Multi-Token Network and Progress
Mastercard began testing the MTN in June 2023, with its first live test planned for May 2024. This test will include a proof-of-concept pilot in collaboration with Standard Chartered Bank Hong Kong, which will explore the tokenization of carbon credits within the Hong Kong Monetary Authority’s Fintech Supervisory Sandbox. Mastercard’s MTN aims to enhance the global payments landscape by improving the efficiency and scalability of cross-border transactions, and the pilot with Standard Chartered Bank is a key part of this effort.
In earlier tests, MTN also worked with the Reserve Bank of Australia to explore the use of wrapped central bank digital currencies (CBDCs). These trials represent a step toward greater integration of digital currencies into mainstream financial systems, demonstrating how blockchain technology can streamline payments and make them more secure and transparent.
| Feature | Details |
|---|---|
| Blockchain Technology | Integrates blockchain to streamline cross-border payments |
| API Integration | Single API for seamless transaction settlement across platforms |
| Real-Time Transfers | Enables fast and efficient transactions through blockchain-based solutions |
| Currency Options | Initially supports USD and EUR for on-chain foreign exchange settlements |
| Commercial Payment Rails | Uses commercial bank payment infrastructure for integration with digital platforms |
| Innovative Use Cases | Expanding the scope of digital asset and commercial infrastructure applications |
This partnership between Mastercard and JPMorgan marks a significant shift in how businesses handle cross-border payments. The integration of blockchain technology provides an efficient, transparent, and scalable solution for global businesses. By addressing common issues like time zone friction and payment delays, this collaboration aims to redefine the future of digital payments, making transactions faster and more accessible than ever before.
Additionally, the collaboration’s ability to enable real-time transfers and integrate with digital asset infrastructures paves the way for new use cases in digital marketplaces and beyond. With Kinexys and MTN working together, businesses can now enjoy the benefits of both traditional financial systems and cutting-edge blockchain solutions.
The partnership between Mastercard and JPMorgan is a significant step forward for the financial industry, demonstrating the growing importance of blockchain in the global payments ecosystem. As the demand for faster, more transparent, and cost-effective cross-border payment solutions continues to rise, blockchain technology offers a promising path forward. This integration not only boosts the efficiency of cross-border payments but also sets the stage for more widespread adoption of digital currencies and decentralized financial systems. The continued collaboration between traditional financial institutions and blockchain innovators will likely shape the future of global payments.
