- JPM is using Onyx, a permissioned version of Ethereum, to tokenize traditional assets
- Focus will shift to tokenizing harder to finance assets like money market funds
JPMorgan, the biggest US bank by asset value, is sticking to its long-term plan to tokenize traditional financial assets despite the current bear market and regulatory ambiguity.
The bank traded $700B in short-term loans on Onyx
JPMorgan has carried out trades in short-term loans on Onyx, a digital asset platform, worth almost $700 billion to date. Onyx is a permissioned version of the Ethereum Mainnet. Users can leverage JPM Coin, a blockchain account, and trade with coins denoting ownership rights to US Treasury bonds.
Goldman Sachs, BNP Paribas among clients
Onyx is used by clients the likes of Goldman Sachs, BNP Paribas and DBS Bank. Over a dozen traditional and less traditional financial institutions are on the waiting list, Tyrone Lobban, head of Onyx Digital Assets, told CoinDesk.
Money market funds to be used as collateral
Lobban added that the platform’s focus would soon shift to tokenizing typically difficult to finance assets, such as money market funds, and using them as collateral. In the more distant future, there are plans to tokenize private funds.
A killer app for TradFi
In his opinion, tokenization is a “killer app” for traditional finance. He explained that private markets like private real estate, equity, and credit are twice the size of public markets, creating a giant disparity as many orders of magnitude are not as liquid.
JPMorgan is undeterred by the bear market
Onyx does not deny that the ongoing bear market is presenting issues and they have felt the “chill” of financial regulators’ scrutiny after the series of high-profile industry collapses, such as FTX and Silicon Valley Bank.
However, nothing has changed for JPMorgan and Onyx, according to Lobban. He recognizes the need for additional caution, but points out that JPMorgan and Onyx’s targets have not been adjusted.
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