JPMorgan Still Wants To “Tokenize” Traditional Finance
Even though the cryptocurrency market is in turmoil, JPMorgan Chase is still planning to tokenize traditional banking.
In an interview with CoinDesk released Thursday (April 27), program leader Tyrone Labbone claimed Goldman Sachs, DBS Bank, and BNP Paribas use the bank’s digital asset program, Onyx, and 15 more banks and broker dealers are interested in joining.
The story says that the bank has used Onyx, a permissioned version of the Ethereum blockchain, to handle nearly $700 billion in short-term loans.
“We think that tokenization is a killer app for traditional finance,” Lobban said.
“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.”
Onyx has been affected by the crypto market fall and regulator attention, according to the study. Lobban said his platform and the bank that owns it haven’t changed, but prudence is needed.
“The timing might be a little bit longer than what it was before, but our strategy hasn’t changed at all,” he 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.”
People all over the world are becoming more interested in tokenized payments. For example, Sir Jon Cunliffe, the deputy governor of the Bank of England, said last week in a speech that the use of stablecoins as payments might need to be restricted.
In the speech, he said, It is very unlikely that any of the current offerings would meet the standards for stability and uniformity that we currently use for commercial bank money and for the payment systems we already have.
“Some or all of the functionality and efficiency claimed for stablecoins, allowing banks deposits to compete better with non-bank payment coins,” Cunliffe explained.
In 2022, the U.S. Federal Reserve gave its opinion on the subject. It said that tokenized deposits were better than stablecoins because they worked like regular deposits.
And Rob Hunter, who works at The Clearing House as deputy general counsel and head of regulatory and legislative affairs, talked about it.
“There’s no reason why banks shouldn’t be allowed to use a new technology to perform functions that are clearly within the business of banking itself,” he said, including “functions like deposit taking and transferring value that banks have been doing for hundreds of years.”
