JP Morgan executes its very first cross-border DeFi trade on a public blockchain. The trade was facilitated by the Monetary Authority of Singapore’s (MAS) Project Guardian.
This trade has laid the foundation for the bridge between traditional and decentralized finance that we will see in the future. The pilot was a step forward into examining how traditional financial institutions can use tokenized assets and DeFi protocols to conduct financial transactions, among other use cases.
The project’s main objectives were to develop use cases for institutional-grade DeFi protocols to study the introduction of regulatory safeguards and controls to mitigate against market manipulation and operational risk.
A live cross-currency transaction involving tokenized JPY and SGD deposits was successfully conducted.
J.P. Morgan was accompanied by its project Guardian partner Singapore-based DBS bank, Tokyo-based SBI Digital Asset Holdings and business leadership platform Oliver Wyman Forum in this successful cross-border DeFi trade.
Also Read: DBS Bank used DeFi to Trade FX and State Securities
The trade was executed using a modified version of AAVE protocol’s smart contract code on the polygon network.
The Aave protocol was used to supply and borrow tokenized foreign exchange transactions utilizing SGD tokenized deposits from J.P. Morgan and JPY tokenized assets from SBI Digital Asset Holdings.
Tyrone Lobban, Head of Blockchain Launch and Onyx Digital Assets at JP Morgan’s Onyx business unit, noted that the tokenized SGD deposits were the first issuance of tokenized deposits by a bank.
