Tokenization Is 'Killer App' for TradFi: JPMorgan

Tyrone Lobban, head of the bank's Onyx digital-assets platform, said JPMorgan is moving forward with tokenization in spite of the downturn in the crypto market.

AccessTimeIconApr 27, 2023 at 12:37 p.m. UTC
Updated May 9, 2023 at 4:13 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

JPMorgan Chase (JPM), the largest U.S. bank in terms of assets, remains steadfast in its plan to "tokenize" traditional-financial assets, largely undeterred by the crypto bear market and regulatory uncertainty.

The bank has processed almost $700 billion in transactions in short-term loans using its Onyx digital-assets platform, a permissioned version of the Ethereum blockchain, where customers can trade tokens that denote ownership rights to U.S. Treasurys as well as use blockchain bank accounts known as JPM Coin.

Among the clients known to be using the Onyx-based repo service are Goldman Sachs (GS), BNP Paribas and DBS Bank. Fifteen more banks and broker-dealers are looking to sign up, Tyrone Lobban, head of Onyx, told CoinDesk in an interview.

As the platform ramps up, Onyx will focus on tokenizing assets that are traditionally hard to finance, such as money-market funds, and will use them as collateral, Lobban said. Further down the road, Lobban expects Onyx will issue a wider range of blockchain-based assets, including private funds.

“We think that tokenization is a killer app for traditional finance,” Lobban told CoinDesk. “If you think about private markets – private credit, private equity and private real estate – they are pretty much double the size of public markets, but many orders of magnitude less liquid, so there’s this huge disparity."

Like others in the crypto sector, the Onyx team has felt the effects of the bear market and greater regulatory scrutiny following the collapse of many major crypto firms.

While acknowledging the need for additional caution, Lobban stressed that nothing has materially changed for JPMorgan and Onyx.

“The timing might be a little bit longer than what it was before, but our strategy hasn’t changed at all,” Lobban said. “In any case, there’s so much work to do that these kinds of momentary lows are really very minor over the long term. We’re lucky to have the resources to be able to actually deliver on these very big use cases, and if we can help bring more clarity to regulators and help them understand the value, then that’s only a good thing as well.”

Edited by Stephen Alpher and Mark Nacinovich.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Ian Allison

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.