JPMorgan Makes History with Singapore’s First-Ever Decentralized Finance Trade

JPMorgan performed the first live cross-border transaction using Polygon on November 2. This achievement was made possible by the Singapore Monetary Authority’s pilot program (MAS).

DBS and SBI Digital Asset have also joined the team in order to perform live trades with DeFi, tokenized deposits, and verifiable credentials.

The MAS’s Project Guardian program seeks to examine the different ways in which traditional financial institutions can employ tokenized assets and decentralized finance (DeFi) protocols to carry out financial transactions, as well as other potential applications of these technologies.

JPMorgan achieves a significant milestone.

According to Sopnendu Mohanty, MAS’s Chief Fintech Officer, the live experiments undertaken by industry partners show that digital assets and DeFi have the potential to transform capital markets if the proper safeguards are in place.

It is a key step toward permitting “more efficient and integrated global financial networks,” according to Mohanty. He went on to claim that Project Guardian has “deepened” the regulator’s understanding of the digital asset ecosystem and helped to shape Singapore’s digital asset strategy. It is a key step toward permitting “more efficient and integrated global financial networks,” according to Mohanty.

Moving forward, the Monetary Authority of Singapore plans to work with a broader range of institutions to promote global learning about the regulations, norms, and best practices for the industry’s “responsible innovation.”

For the initial testing phase, JPMorgan Chase & Co.’s blockchain subsidiary for wholesale payments, known as Onyx, cooperated with DBS Bank of Singapore, SBI Digital of Japan, the Singapore Exchange’s Marketnode digital asset platform, and Temasek. In addition to replicating the purchase and selling of tokenized government bonds, the participants conducted a cross-border transaction involving tokenized Singapore Dollars and Japanese Yen.

Engage in Business Using Polygon, Aave, and Other Tools

Tyrone Lobban, Head of Onyx Digital Assets, confirmed the latest development through Twitter:

“WORLD! As part of MAS’s Project Guardian, J.P. Morgan completed its first trade on the public blockchain using DeFi, Tokenized Deposits, and Verifiable Credentials. This transaction took place “LIVE.”

Lobban revealed that the major financial institution planned to perform the transaction on Ethereum and chose Polygon as their preferred platform because of the cheap cost of gas expenses. However, future phases of Project Guardian would look into alternative blockchains, according to the executive, citing the MAS’s goal of open and interoperable networks as an incentive.

JPMorgan used Aave to create its permission pools concept, as well as a customized version of Aave Arc to define unique parameters like interest rate and currency conversion rate. In addition, in exchange for the Japanese yen, the financial institution distributed a tokenized Singapore Dollar (TSD) deposit. TSD is a “native deposit token” with a constant value on the blockchain that avoids the scalability issues that afflict stablecoin.

JPMorgan used W3C Verifiable Credentials to provide Aave with compliant access (VC). Rather than simply allowing addresses to be listed, venture capitalists, according to Lobban, provide a “fine-grained” degree of control that can include risk limits, asset limits, and other characteristics.

The bank has created a separate institutional wallet in order to prevent traders from accessing corporate funds. Transactions involving trades, on the other hand, are limited to being carried out entirely with the assistance of authorized DeFi protocols, and every trade institution holds VCs.

The announcement comes just a few weeks after JPMorgan CEO Jamie Dimon confirmed his negative view of the asset class, referring to Bitcoin as a “decentralized Ponzi Scheme.”

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