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Forex in this article
• First transaction of a major bank on the public blockchain
• Blockchain pilot project to test the use of the DeFi network for traditional banks
• Efficient and integrated overall Financial markets thanks to digital assets
Working with Singapore’s DBS Bank, Japan’s SBI Digital, and the Singapore Stock Exchange’s digital asset platform, Onyx, JPMorgan’s wholesale payments blockchain division, has completed a first transaction. This was to simulate the trading of tokenized Singapore dollar deposits as well as tokenized Japanese yen and tokenized government bonds.
The transaction, unique in the world to date, is a decentralized financial transaction (DeFi) that was carried out on an Ethereum Layer 2 blockchain. The framework for the transaction is the Monetary Authority of Singapore’s Blockchain pilot project “Project Guardian”. (MAS). According to the press release, this pilot project will test the different ways that traditional financial institutions can use the DeFi network and tokenized assets.
A big step: what does the transaction look like?
Blockchain Program Manager at JPMorgan, Tyrone Lobban, announced via Twitter the “big step” that JPMorgen has taken with this transaction on a public blockchain.
WORLD! JP Morgan executed its first *LIVE* transaction on the public blockchain using DeFi, Tokenized Deposits & Verifiable Credentials, part of @MAS_sg Project Guardian 🙌🚀🔥https://t.co/XI212SG4zg Lots of world premieres here, & since it’s public ⛓ here’s a slide 🧵 on what we did:
-Ty Lobban (@TyLobban) November 2, 2022
As the Onyx leader reports in other articles, the Polygon network was chosen because Ethereum technology wanted to use cheap gas fees (transaction fees) for expensive identity verification operations. In the future, however, other blockchains are also expected to be used in the project.
In addition, a modified version of Aave Arc was used in order to be able to use parameters such as exchange rates and interest rates in the loan pool. Singapore Dollar (TSD) tokenized deposit was used for the transaction as it is a native deposit token with “stable on-chain value without the scalability issues of stablecoins.” It is also the first issuance of tokenized deposits by a bank, writes Tyrone Lobban in another article.
In terms of security, the integrated “on-chain” verification of verifiable identifiers (VC) 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 interfaces no longer have need “KYC checks”. must perform. Compliance is pushed to the limit, not in the application,” Lobban said on Twitter.
Feasible rationalization solution: how big is this transaction?
According to CryptoPotato, Sopnendu Mohanty, Chief Fintech Officer of MAS, sees the pilot as an opportunity to show that digital assets can transform capital markets – and describes “Project Guardian” as “the first major step towards global financial networks more efficient and integrated”. The aim is to gain a deeper understanding of the crypto ecosystem and further develop Singapore’s strategy to grow the crypto sector. Cooperation with international financial institutions should be further expanded in the future.
“Crypto enthusiasts have never doubted that innovations emerging from this space — especially DeFi innovations — have the potential to make international banking cheaper, faster, and more efficient,” Forbes magazine quoted Mikkel Morch. , President of Digital Asset Hedge Find ARK36. “Now traditional finance giants are beginning to validate this, using DeFi protocols as a viable solution to streamline international silver trade.”
According to Forbes, GlobalBlock’s Marcus Sotiriou is surprised that JPMorgan is going ahead with such a move in the crypto space: “It’s a little surprising to see JPMorgan at the forefront of this trend, considering the importance of the bank’s CEO’s comments on the crypto sector, but as the old saying goes, “actions speak louder than words. The analyst refers to statements by JPMorgan CEO Jamie Dimon, known as a crypto-skeptic, who in September referred to cryptocurrencies as “digital”. Ponzi scheme” had designated.
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