Tokenization’s ‚Killer App‘ for TradFi: JPMorgan Leads the Way

• JPMorgan Chase is using its Onyx digital-assets platform to process almost $700 billion in transactions in short-term loans.
• The platform is tokenizing traditional-financial assets and clients such as Goldman Sachs, BNP Paribas, and DBS Bank are known to be using it.
• Tyrone Lobban, head of Onyx, believes that tokenization is a „killer app“ for traditional finance.

JPMorgan Moving Ahead with Tokenization

JPMorgan Chase (JPM), the largest U.S. bank in terms of assets, is continuing its plan to „tokenize“ traditional-financial assets despite the downturn in the crypto market and regulatory uncertainty. The bank’s Onyx digital-assets platform has processed almost $700 billion in transactions in short-term loans and fifteen more banks and broker-dealers are looking to sign up for it.

Onyx Platform

The permissioned version of Ethereum blockchain allows customers to trade tokens that denote ownership rights to U.S. Treasurys as well as use blockchain bank accounts known as JPM Coin on the Onyx platform. Clients such as Goldman Sachs (GS), BNP Paribas and DBS Bank are known to be using the service while other firms like money-market funds will use them as collateral.

Tokenization Benefits

Tyrone Lobban, head of Onyx, believes that tokenization can benefit traditional finance by providing liquidity for private markets which are double the size of public markets but less liquid by many orders of magnitude. He stated that “We think that tokenization is a killer app for traditional finance” during an interview with CoinDesk.

Crypto Bear Market Impact

Despite the bear market conditions in the crypto sector, JPMorgan remains committed to its plans regarding tokenization due to its potential benefits over traditional systems and multiple firms signing up for its services on the Onyx platform.

Conclusion

Tokenization provides a unique opportunity for traditional finance firms like JPMorgan Chase which can help facilitate liquidity among private markets by leveraging blockchain technology through their Onyx digital-assets platform