Tokenization Is Traditional Finance’s ‘Killer App’: JP Morgan | coindesk JAPAN

US bank JPMorgan Chase & Co. is sticking to its plan to “tokenize” its traditional financial assets despite the bear market and regulatory uncertainty.

The bank uses digital asset platform Onyx, a permissioned version of the Ethereum blockchain, to process nearly $700 billion in short-term lending transactions. Customers can trade tokenized US Treasuries or use the bank’s own digital currency, JPM Coin.

Goldman Sachs, BNP Paribas, DBS Bank also use Onyx-based repo transactions (tradings that raise funds against government bonds), and Onyx head Tyrone Lobban has added 15 more. Banks and brokers are considering a deal, he told CoinDesk.

Along with increasing usage, Onyx will focus on tokenizing traditionally hard-to-lender assets like MMFs and using them as collateral, Robin said. Additionally, he expects to be able to issue a wider range of tokenized assets, including private funds.

“We think tokenization is the killer app for traditional finance,” Robin said.

“If you look at the private markets (private margin, private equity, private real estate), they are twice as big as the public markets, but the liquidity is an order of magnitude smaller, and the gap is huge.”

Like other crypto companies, the Onyx team is aware of the bear market impact and increased regulatory scrutiny associated with the failures of many crypto giants.

Recognizing the need for further caution, Robin stressed that there would be no material changes for JPMorgan and Onyx.

“It may take a little longer than it used to, but our strategy hasn’t changed at all,” he said. We are fortunate to have the resources to enable these huge use cases, and if we can help clarify regulation and help regulators see the value, that’s good too.” Mr Robin said.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: Shutterstock
｜Original: Tokenization Is ‘Killer App’ for TradFi: JPMorgan