share in this article
Forex in this article
• First transaction by a major bank on public blockchain
• Blockchain pilot project to test the use of DeFi networks for traditional banks
• Effective and integrated global financial markets through digital assets
In partnership with DBS Bank of Singapore, SBI Digital in Japan and the digital asset platform of the Singapore Stock Exchange, JPMorgan’s wholesale payments blockchain arm Onyx has completed an initial transaction. It was about simulating trading in tokenized Singapore dollar deposits as well as tokenized Japanese yen and tokenized government bonds.
The transaction, which is unique in the world to date, is a decentralized finance (DeFi) transaction that was executed on an Ethereum Layer 2 blockchain. The framework for the transaction is the Blockchain pilot project “Project Guardian” of the Monetary Authority of Singapore (MAS). According to the press release, this pilot project will test the different ways traditional financial institutions can use the DeFi network and tokenized assets.
A big step: What does the transaction look like?
The head of the blockchain program at JPMorgan, Tyrone Lobban, announced via Twitter the “big step” that JPMorgen took with this transaction on a public blockchain.
WORLD! JP Morgan has executed its first *LIVE* trade on public blockchain using DeFi, Tokenized Deposits & Verifiable Credentials, part of @MAS_sg Project Guardian 🙌🚀🔥https://t.co/XI212SG4zg Lots of world firsts here and since this is public ⛓ here’s a transparent🧵 of what we did:
– Ty Lobban (@TyLobban) 2 November 2022
As the Onyx leader reports in other posts, the Polygon network was chosen because Ethereum technology wanted to use the cheap gas fees (transaction fees) for expensive identity verification operations. In the future, however, other blockchains should also be used within the project.
Furthermore, a modified version of Aave Arc has been used to be able to use parameters such as exchange rates and interest rates in the loan pool. The tokenized Singapore Dollar (TSD) deposit was used for the transaction, as it is a native deposit token with “stable on-chain value without the scalability issues of stablecoins.” This is also the first issue of tokenized deposits from a bank, writes Tyrone Lobban in another post.
In terms of security, the built-in “on-chain” verification of Verifiable Credentials (VCs) is relevant because it makes the identity composable and a kind of “identityLego“We designed this so that VC-based compliance checks can be used with *any* DeFi protocol without requiring those protocols to know anything about VCs, so DeFi frontends no longer need ‘KYC checks’.” Compliance is pushed to the edge, not in the app,” Lobban said on Twitter.
Feasible rationalization solution: What is the significance of this transaction?
According to CryptoPotato, MAS Chief Fintech Officer Sopnendu Mohanty sees the pilot project as an opportunity to show that digital assets can transform capital markets – and describes “Project Guardian” as “the first big step towards more efficient and integrated global financial networks”. The goal is to gain a deeper understanding of the crypto ecosystem and further develop Singapore’s strategy for developing the crypto sector. Cooperation with international financial institutions must be further developed in the future.
“Crypto enthusiasts have never doubted that the innovations coming from this space – especially DeFi innovations – have the potential to make international banking cheaper, faster and more efficient,” Forbes magazine quoted Mikkel Morch, chairman of Digital Asset Hedge Find ARK36. “Now the giants of traditional finance are starting to validate this by using DeFi protocols as a viable solution to streamline international money trading.”
According to Forbes, GlobalBlock’s Marcus Sotiriou is surprised that JPMorgan is moving forward with such a transaction into the crypto universe: “It’s a little surprising to see JPMorgan at the forefront of this trend, given how critical the bank’s CEO had commented on the crypto sector. But as the old saying goes, “actions speak louder than words.” The analyst refers to the statements of JPMorgan CEO Jamie Dimon, known as a crypto-skeptic, who described cryptocurrencies as “digital” in September. Ponzi scheme” had appointed.
Gearing must be between 2 and 20
Image credits: Stanislav Duben / Shutterstock.com, wael alreweie / Shutterstock.com