JPMorgan recently announced that it has successfully issued a debt note on behalf of Galaxy Digital on the Solana blockchain.
This is a landmark moment because it represents one of the first times that a public blockchain has been used in this way.
JPMorgan has used blockchains in the past, however this was mainly private blockchains, such as its own Onyx blockchain. They also used Coinbase’s blockchain, Base, to create their own JPMD stablecoin but again this was for internal use.
What is a Debt Note?
A debt note is created when a company, in this case Galaxy Digital, is looking to raise money. The company promises to pay it back, usually with interest.
JPMorgan acts as the middleman, laying out the structure of the debt note and finding an investor to lend the money needed. Investors are more comfortable when the middleman is a major bank, and JPMorgan already has the connections to big buyers which Galaxy Digital would struggle to reach on their own.
Moreover, a debt note can be complex, having a middleman like JPMorgan with the experience and expertise to handle the documentation can make things easier.
In this case, the debt note was purchased by Coinbase and Franklin Templeton, they are the investors. The money is then given to Galaxy Digital, who pay it back after time with interest, and JPMorgan passes it back to the investors (after taking their cut for their services).
The money lent and to be repaid was USDC, the stablecoin issued by Circle. Custody of the debt note token USCP, including private key custody and wallet services, was handled by Coinbase.
Why Did JPMorgan Choose Solana and not Ethereum?
According to their press release, “Solana’s architecture makes it possible for firms like J.P. Morgan to arrange financial transactions with the trust and performance the market has always needed.”
It’s likely that transaction speeds and low cost fees were part of JPMorgan’s decision to use Solana to tokenize this debt note.
Additionally, Solana is a layer 1 blockchain unlike Base which means there is no need to manage multiple layers.
JPMorgan also stated in an interview with Reuters that they plan to continue using blockchains in the future for this type of debt deal transaction. As for whether that will be Solana, or whether they will experiment with other public blockchains remains to be seen.
Solana Wallet Options
Adoption like this by big names such as JPMorgan can only be good for the Solana ecosystem. It gives a network more credibility and this can attract investors, especially as more tokenization is bound to occur in the future.
When it comes to finding a wallet with full support for Solana tokens, one strong option is Best Wallet, a secure and easy-to-use self custody wallet.
There are several reasons why Best Wallet remains popular among beginners and experienced investors alike. One of them is the fact that users remain in full control of their assets without sacrificing privacy. It does not require KYC requirement, which makes it a more preferred option to CEXes, which require ID verification even for basic trading.
The benefits don’t stop there, however. Best Wallet also lets users buy and swap cryptos for one another inside the wallet itself. Therefore, they won’t need to move assets between different platforms or pay transfer fees.
At the same time, the wallet is multichain, which means that it supports cryptocurrencies from a variety of blockchains, giving it a strong edge over decentralized exchanges. Users found its interface very intuitive and easy to navigate, thereby making it easier for them to dive into the crypto sector and maximize all the opportunities it offers.
Other notable attractions include fiat payments, staking perks, portfolio management, and a token launchpad, further reinforcing its appeal as one of the most comprehensive wallets today.
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