JP Morgan’s First-Ever DeFi Trade Executed Successfully on Public Blockchain

• Blockchain Council
• November 05, 2022

The renowned multinational banking service provider JP Morgan has successfully executed cross-border transactions on the blockchain. The firm executed its first-ever blockchain-based DeFi transaction. The trade was carried out for the Monetary Authority of Singapore’s latest project, Project Guardian. JP Morgan was working extensively to explore opportunities for financial service in the web3 space. This trade was an initial step in utilizing decentralized applications for wholesale funding markets. As per the reports from JP Morgan, their trade program was to “explore potential decentralized finance application in wholesale funding markets.”

The pilot was set up to examine using DeFi protocols and tokenized assets by traditional banking institutions to conduct financial services and transactions. DBS Bank, the largest Bank of Singapore and a Tokyo-based financial services provider SBI Digital Asset Holdings and renowned platform for business leadership, Oliver Wyman Forum were also a vital contributor to the DeFi Trade of JP Morgan. 

Ethereum layer 2 networks from Polygon and a modified AAVE protocol smart contract were used to execute the trade. As reported by MAS, “live cross-currency transaction” involved tokenized Yen deposits, Singaporean Dollars, and a simulation of trading with tokenized bonds issued by the government.

WORLD! J.P. Morgan has executed its 1st *LIVE* trade on public blockchain using DeFi, Tokenized Deposits & Verifiable Credentials, part of @MAS_sg Project Guardian 🙌🚀🔥https://t.co/XI212SG4zg Many world 1sts here, & since this is public ⛓ here’s a transparent🧵on what we did:

— Ty Lobban (@TyLobban) November 2, 2022

The head of the blockchain launch and digital assets at JP Morgan, Tyronne Lobban, shared the news on November 2 that the Singaporean Dollar is the first tokenized currency issued by a bank.

In a tweet, Tyronne shared,” World! JP Morgan has executed its 1st *LIVE* trade on public blockchain using DeFi, tokenized deposits and verifiable credentials, part of @MAS-sg Project Guardian. Many worlds 1sts here and since this is public, here is a transparent report on what we did.”

Additionally, the Chief FinTech Officer at MAS, Sopnendu Mohanty, claimed it was a “big step” toward creating more efficient and sustainable financial institutions for services and networking. He posted, “The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralized finance have the potential to transform capital markets.”

Onyx’s CEO, a JP Morgan subsidiary, Umar Farooq, added that they are working closely on developing financial services with blockchain technology. AAVE, a DeFi lending protocol, also added that DeFi trade is a “huge milestone” for industrial applications. Moreover, Project Guardian was officially launched in May 2022, leading to a partnership between DBS and JP Morgan to build an all-new blockchain interbank platform that complements CBDCs.

Another premium financial services provider, Boston Consulting Group, researched the scalability of tokenized currency. Their report estimated it will reach a $16.1 Trillion market value by 2030. Furthermore, the COO of Matrixport, a digital asset management platform, stated,” almost everything could be tokenized in 5-10 years.”

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