JPMorgan Chase has made a big turn towards Web3 by completing its first structured transaction on a public blockchain. Previously, the global bank has only used private blockchains tailored for institutional clients.
As per the press release, the test transaction was conducted jointly with Ondo Finance, a firm that specializes in tokenizing real-world assets such as U.S. Treasuries, and Chainlink, a top blockchain oracle network. They collectively utilized Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to bridge the private blockchain of JPMorgan (Kinexys) to the public blockchain of Ondo (Ondo Chain).
Due to this move, both Chainlink and Ondo saw a brief price surge despite a sluggish crypto market. ONDO jumped 3.48%, reaching a high of $1.13, while LINK rose 1.5%, hitting $17.79. However, both tokens eventually lost steam due to the volatile nature of the crypto market. At the time of writing, ONDO and LINK had dropped to $1.02 and $16.87, respectively.
The deal consisted of exchanging tokenized short-term US Treasuries. These are traditional government bonds, but in this case, they were digitized and issued on the blockchain. The settlement of the trade’s payment was managed on JPMorgan’s in-house blockchain, while the asset leg was handled on the open Ondo Chain.
Chainlink’s infrastructure helped ensure the trade occurred in synchrony on the two chains via a model termed Delivery versus Payment (DvP). It ensures that money and assets get exchanged simultaneously, minimizing risk.
According to Ondo Finance CEO Nathan Allman, this proves that tokenized real-world assets are now capable of being issued, traded, and settled via blockchain technology in a compliant and secure manner. Chainlink co-founder Sergey Nazarov chimed in and said this gesture indicates large banks are beginning to roll out public blockchain technology, and no longer merely testing it.
JPMorgan’s blockchain subsidiary, Kinexys, has already handled about $2 billion in transactions per day and backs $1.5 trillion in derivatives contracts. This development indicates that mainstream finance is becoming increasingly serious about embracing decentralized technology.
With the combined value locked in tokenized real-world assets now over $12 billion across over 80 platforms, it’s evident blockchain-based finance is picking up pace. Furthermore, JPMorgan’s latest action can potentially set the benchmark for how public and private financial systems get integrated in the future.
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