JPMorgan Develops Tokenization Proof of Concept with Industry Startups

Published 6 months ago

JPMorgan’s blockchain arm, Onyx, has developed a proof of concept to demonstrate how tokenization could enhance the management of financial assets. The project involved a collaboration with various industry startups and was conducted under the Project Guardian of the Monetary Authority of Singapore.

Blockchain Implementation in Asset Management

The proof of concept was designed to allow fund managers to tokenize their portfolios on selected blockchains. This capability extends to wealth managers, who could buy and rebalance their positions across these interoperable blockchain networks.

The blockchain stacks chosen for this proof of concept include Provenance Blockchain, Onyx Digital Assets by JPMorgan itself, and Avalanche. Cross-chain communication protocol Axelar and issuance-trading platform Oasis Pro also contributed to the initiative.

It should be noted that the transactions were executed in a permissioned manner. This means that access was restricted to a select group of participants on private blockchain networks. As a result, the transactions will not appear on public chain explorers such as Axelarscan, Mintscan, or Snowscan. However, example transactions can be found in a recent report by JPMorgan and Apollo.

Axelar’s Contribution to Project Guardian

Axelar created a permissioned instance to connect different chains, modifying its existing cross-chain configuration to align with the privacy and access management requirements set by the proof of concept.

According to Galen Moore, global communications lead at Axelar, the primary goal of Project Guardian was to demonstrate a system that could allow a portfolio manager to manage a large number of discretionary portfolios comprising tokenized assets across multiple blockchains.

JPMorgan’s Advances in Blockchain Technology

Although it remains uncertain whether public chains or mainnets will be involved in future deployments, JPMorgan has been actively exploring possibilities in the blockchain technology space. In its most recent venture, it has given institutional clients more programmability over its payment offerings on its blockchain-based accounts with the JPM Coin system.

The bank has also been experimenting with on-chain digital wallets, permitting users to store and control digital identity on its platform.

JPMorgan views its contribution to Project Guardian as a significant moment at the intersection of traditional finance and blockchain technology. The bank views this as the first step towards delivering higher quality discretionary investment portfolios in a more thoughtful and efficient manner to enhance the end investor’s experience and results.

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