J.P. Morgan performs its first DeFi cross-border transaction, details inside

The American multinational investment bank JP Morgan on 2 November completed its first-ever decentralized finance (DeFi) on-blockchain cross-border transaction. It is a part of the Project Guardian initiated by Singapore’s central bank, the Monetary Authority of Singapore (MAS).

The transaction was completed on Ethereum layer-2 network Polygon using a modified version of AAVE protocol's smart contract code. It involved tokenized deposits of Singaporean Dollar (SGD) and Japanese Yen (JPY), in addition to a simulated exercise of trading tokenized government bonds.

Project guardian for expansive DeFi

The Project Guardian was launched by the MAS on 31 May 2022.

The Project Guardian aims to “explore potential decentralized finance (DeFi) applications in wholesale funding markets.” It is an exercise in testing how traditional financial systems can harness digital tokens and DeFi protocols for different use cases.

In addition to the JP Morgan group, Singapore’s largest bank the DBS Bank, the Japanese banking firm SBI Digital Asset Holdings, and the New York-based leadership program Oliver Wyman Forum also participated in the program.

Tyrone Lobban, Head of Blockchain Launch and Onyx Digital Assets at JP Morgan's Onyx business Unit took to Twitter to share that the tokenized SGD deposits were the first issuance of tokenized deposits by a bank.

Sopnendu Mohanty, Chief FinTech Officer, MAS said, “The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralised finance have the potential to transform capital markets. This is a big step towards enabling more efficient and integrated global financial networks. Project Guardian has deepened MAS’ understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy.”

Tokenization to reach $16.1T by 2030

In September, the American management consulting firm Boston Consulting Group partnered with Singapore-based private market exchange ADDX to put out a report that pointed out that the total size of tokenized illiquid assets, including real estate and natural resources could reach $16.1 trillion by 2030.

Titled Relevance of on-chain asset tokenization in ‘crypto winter,’ the report stated that this was a “highly-conservative forecast” and that in a best-case scenario, the tokenization of global illiquid assets could reach $68 trillion.

Singapore is one of the leading destinations today when it comes to DeFi and blockchain innovation.

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