Abu Dhabi – 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.

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 and/or event-based programmable capabilities. As part of the pilot, 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 innovation delivers more 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 rich transaction data, are in a better position 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. The successful pilot will also pave the way for more use cases, such as automated and conditional invoice payments, margin funding, and settlement solutions.

“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,” said Naveen Mallela, Co-Head of Onyx by J.P. Morgan.

FAB is at the forefront of providing cutting-edge technologies to create a future-ready bank that delivers smarter and more agile solutions to serve its clients’ needs, as underscored by this innovative pilot in collaboration with J.P. Morgan.

ABOUT FIRST ABU DHABI BANK

Headquartered in the United Arab Emirates, First Abu Dhabi Bank (FAB) is one of the world’s largest and safest financial institutions, with total assets of AED 1.2 trillion (USD 320 billion) as of end-June 2024 and a credit rating of Aa3/AA-/AA- from Moody’s, S&P and Fitch respectively, with a stable outlook.

FAB provides financial services and expertise across five business units – Investment Banking, Corporate and Commercial Banking, Consumer Banking, Private Banking, and Global Markets – through an international network that covers 20 markets worldwide connecting clients to more than 60% of global GDP.

Listed on the Abu Dhabi Securities Exchange (ADX), FAB is a leading Islamic finance provider and a pioneer in sukuk issuance offering comprehensive Shari’ah-compliant products. FAB is also a regional leader in sustainability, with an MSCI ESG rating of ‘A’ and ranked among the top 10% of banks globally according to Refinitiv’s ESG scores – leading in the MENA region. The bank also received a regional-best Low ESG Risk evaluation from Sustainalytics, and the highest CDP score among UAE banks. FAB currently chairs the Net-Zero Banking Alliance (NZBA) Steering Group and was the first UAE and GCC bank to join the UN-convened organisation in 2021.

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