JPMorgan Chase, the largest U.S. bank by assets, is pushing forward with its plan to “tokenize” traditional financial assets using its Onyx digital assets platform. Despite regulatory uncertainty and a bear market in the crypto sector, the bank has processed almost $700 billion in transactions in short-term loans using the permissioned Ethereum-based blockchain.
Onyx allows customers to trade tokens that denote ownership rights to U.S. Treasurys, and to use blockchain bank accounts called JPM Coin. The platform’s clients include Goldman Sachs, BNP Paribas, and DBS Bank, and 15 more banks and broker-dealers are looking to sign up.
Tyrone Lobban, head of Onyx, said the platform would focus on tokenizing traditionally hard-to-finance assets such as money-market funds and using them as collateral. “We think that tokenization is a killer app for traditional finance,” Lobban told a crypto news publishing house.
JPMorgan’s Onyx blockchain and payments program offers Liink, a network primarily created for international trade. Institutions can exchange financial information and confirm transactions using a platform provided by Onyx. The partnership between Visa and JPMorgan and its suite of blockchain technologies is an alternative to the widely used SWIFT messaging system.
While acknowledging the need for additional caution, Lobban stressed that nothing has materially changed for JPMorgan and Onyx. JPMorgan CEO Jamie Dimon has also recognized the potential of blockchain, stating that “certain ‘real’ components of blockchain exist.”
JPMorgan’s push towards tokenization could revolutionize traditional finance by making traditionally illiquid private markets more accessible to investors. The bank’s commitment to the technology despite market conditions and regulatory uncertainty underscores its confidence in the potential of blockchain-based finance.