Thursday, September 28, 2023

JP Morgan Crypto: First International Bank Trade on Polygon

JP Morgan made history by completing its first international transaction using the Ethereum layer-two network, Polygon. The trade was part of the Monetary Authority of Singapore’s Project Guardian, an initiative exploring blockchain’s potential in wholesale funding. Additionally, the project is a massive step forward in the institutional use of blockchain technology. Here’s everything you need to know about the first international JP Morgan crypto transaction.

The JP Morgan crypto trade is a significant first in traditional finance. 

JP Morgan made history with this cross-border transaction. It marks the first time a major traditional financial institution made a transaction using a public blockchain. The bank made the trade using Polygon, the Ethereum layer-two blockchain, and a modified aave protocol, eliminating third parties. In addition, the bank transferred tokenized cash deposits using its blockchain division, Onyx. Aave developers commented on the historic transaction on Twitter. 

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“@jpmorgan transacting on a public blockchain using Aave smart contracts is a huge milestone for DeFi,” reads the Twitter thread. “[A]nd represents a massive step forward towards bringing traditional financial assets into DeFi […].”

According to Forbes, JP Morgan’s crypto adoption is somewhat surprising. Because the bank’s CEO, Jamie Dimon, notoriously called crypto a “decentralized Ponzi scheme” in September 2022. 

Project Guardian tests the potential for blockchain tech in institutional finance. 

Singapore’s Deputy Prime Minister, Heng Swee Keat, launched Project Guardian in partnership with international financial institutions in May 2022. Basically, they aim to test and safely implement “institutional grade DeFi protocols” to revolutionize international banking. Additionally, JP Morgan’s pilot test is the beginning of the project’s goal to create a liquidity pool for tokenized bonds and deposits. 

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Especially if successful, Project Guardian could make Singapore a leader in the institutional adoption of blockchain technology. Additionally, the UK’s House of Commons recently passed a bill recognizing crypto as a regulated asset. And after the recent collapse of FTX, several crypto executives are calling for clearer guidelines in the US. 


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