Investment banking company JPMorgan Chase & Co. executed its first DeFi live trade on 2 November 2022. The bank first tokenized 100,000 Singaporean dollar deposits and SBI Digital Asset Holdings tokenized Japanese yen. The trade was executed using the Ethereum sidechain network, Polygon, and a modified version of the Aave protocol’s smart contract code.
This was the first-ever cross-border tokenized forex transaction. The transaction marks a significant step toward integration of traditional finance and decentralized finance (DeFi).
The transaction was executed as part of the pilot study program with Singapore’s central bank Monetary Authority of Singapore (MAS). The pilot study was aimed at developing an understanding of how traditional financial institutions can use tokenized assets and blockchain protocols to facilitate transactions. It is also meant to explore other use cases of the underlying technology.
For the first testing phase, JPMorgan’s blockchain division for wholesale payments—called Onyx—partnered with Singapore’s DBS Bank, Singapore Exchange’s digital asset platform Marketnode, Singaporean global investment company Temasek, and Japan’s SBI Digital.
Standard Chartered Plc. and HSBC Holdings are also part of the pilot study program that has been named Guardian.
As part of the following trial, DBS and SBI traded against liquidity pools of tokenized government bonds. For this, they used tokenized SDG from DBS and Singapore Government Securities bonds. SBI did the same for Japanese bonds and tokenized yen.
“A live cross-currency transaction involving tokenized JPY and SGD deposits was successfully conducted. In addition, a simulated exercise was performed involving the buying and selling of tokenized government bonds,” a press release from MAS stated.
Tyrone Lobban, head of Onyx Digital Assets, shared the development on Twitter.
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 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. This is a big step towards enabling more efficient and integrated global financial networks,” Sopnendu Mohanty, Chief FinTech Officer at MAS, said, according to Cointelegraph.
After the announcement, Polygon MATIC witnessed a huge surge in trading volume by over 200%, according to coinmarketcap data. It has recorded over 10% jump in value as well. MATIC is currently trading at $1.09 level.
Meanwhile, Polygon has also been making other significant strides this week. Meta’s Instagram is all set to introduce tools that allow creators on its platform to mint and sell NFTs built on the Polygon blockchain.
