Renowned investment banking firm JP Morgan Chase meant to be involved in finance and transactions, after all this is what it’s competency is. Yet the instance of JP Morgan involved in a transaction made news all over given the catalyst—it was a blockchain based transaction.
The Monetary Authority of Singapore led the first industry pilot—Project Guardian—made the blockchain transaction possible. Apart from JP Morgan, DBS Bank, SBI Digital Asset Holdings and Oliver Wyman Forum like firms were part of the initiative.
On November 2nd, 2022 it was reported JP Morgan and other institutions used the Polygon network for the transaction. These entities together are involved in conducting transactions of the foreign exchange and government bonds against liquidity pools. Tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Singapore Dollars and Japanese Yen were said to be part of the pool.
Pilot project of MAS is said to be another effort to figure out the ways traditional financial institutions like banks can use defi protocols and tokenized assets. This would enable these institutions to initiate financial transactions and for other similar utilities.
Head of Onyx business unit of JP Morgan—Onyx Digital—and blockchain launch, Tyrone Lobban went on to Twitter and stated depositing tokenized Singapore dollars was the first instance of a bank issuing tokenized deposits.
Chief Fintech Officer at MAS, Sopnedu Mohanty said the tokenized assets transfer was a big step to make financial networks more efficient. He also cited the latest pilot to help the digital asset strategy of Singapore.
JP Morgan’s Onyx Digital CEO Umar Farooq said the on-chain transaction by the investment bank was the first instance of a major bank tokenizing deposits over a public blockchain.
The transaction was facilitated on Polygon, a prominent Ethereum based layer 2 network. It also used a modified form of smart contract code of Aave Protocol.
In May 2022, the Project Guardian launched officially following the partnership of both the banking giants—JP Morgan and DBS Bank. The intention was to create a new platform supporting blockchain interbanking and would work as an add on to the efforts for the central bank digital currencies (CBDC).
Many analytic firms estimated the size of liquid assets in tokenized form to achieve tremendous heights in future. Such a firm noted an estimate in a report in September 2022, by end of the decade the tokenized liquid assets to reach valuation of more than 16 trillion USD.
Source: https://www.thecoinrepublic.com/2022/11/05/banks-like-jp-morgan-dbs-transacts-over-blockchain/