JP Morgan bank completed its first live operation this week using DeFi, verifiable credentials and tokenized deposits in collaboration with other major financial institutions and within the framework of a project led by the Central Bank of Singapore.
The head of Onyx, JPMorgan's blockchain and digital assets unit, has announced the operation on Twitter via an official statement from the Monetary Authority of Singapore, the country's central bank, detailing the process.
JP Morgan, SBI Digital Asset Holdings and DBS Bank have been the banks that have completed the first pilot program of the Central Bank of Singapore in which they have carried out foreign exchange and government bond transactions with liquidity pools composed of Singapore Government Bonds tokenized, Japanese Yen, Japanese Government Bonds and Singapore Dollar.
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The Central Bank of Singapore expressed in its statement that “a real cross-currency transaction involving tokenized deposits in JPY and SGD has been successfully carried out. Similarly, a simulated exercise of buying and selling Tokenized State bonds has been carried out. He also added that: "Live transactions executed under this first pilot demonstrate that cross-transactions of tokenized assets can be traded, cleared and settled instantly between direct participants, freeing up the costs involved in executing trades through intermediaries." clearing and settlement, and the management of bilateral counterparty trading relationships, as required in today's over-the-counter markets.
To do this, JP Morgan has taken advantage of the cheap rates offered by Polygon, Ethereum's Layer 2 solution to carry out this tokenized operation, also using verifiable credentials from W3C and the DeFi Aave protocol, taking advantage of its concept of "authorized groups."
This operation is part of the Guardian project, designed to explore the economic potential and use cases of asset tokenization together with the collaboration of actors in the financial industry.
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This program is allowing the main companies in the financial sector with which the Monetary Authority of Singapore has partnered to take advantage of and explore the tokenization of traditional assets and DeFi in very varied cases within the financial sector, revealing the benefits that DeFi and technology Blockchain can contribute to financial markets, such as efficiency when carrying out transactions or interoperability.
On the other hand, The Central Bank of Singapore has announced that it will continue to explore different uses of technology and that, within the Guardian project, they have two new pilots planned: the first together with Standard Chartered Bank to explore the issuance of tokens linked to commercial financing assets and the second, which will focus, together with HSBC, UOB and Marketnode on the management of wealth and in the local exchange of digital assets.
