JPMorgan, in collaboration with Kinexys and Ondo, has successfully conducted its first transaction of tokenized Treasury bonds on a public blockchain through Ondo Chain, leveraging Chainlink’s cross-chain technology.
This Delivery versus Payment (DvP) operation marks a significant milestone in the interoperability between private and public blockchains.
The objective of JPMorgan is to automate settlements and address a systemic issue estimated at $900 billion over ten years.
JPMorgan Completes First Public Transaction of Tokenized Treasury Bonds
This is a historic first for the largest US bank. JPMorgan connected its institutional payment network Kinexys to a public blockchain via Ondo Chain, utilizing Chainlink’s cross-chain technology. A transaction involving tokenized Treasury bonds was successfully completed on Ondo’s testnet, signaling a new era in integrating traditional finance with open blockchains.
A Barrier-Breaking DvP Transaction
At the core of this pilot is a Delivery versus Payment (DvP) operation, a model that ensures simultaneous payment and asset delivery. Kinexys, JPMorgan’s private blockchain infrastructure, had never interacted with a public network until now. The payment was facilitated by Kinexys, while the asset in question came from Ondo Finance’s OUSG fund, backed by short-term Treasury bonds.
The entire process was orchestrated by the Chainlink Cross-Chain Interoperability Protocol, through its Runtime execution environment, facilitating reliable and instant settlement between the two networks.
JPMorgan Embraces Tokenization
Handling over $2 billion daily through Kinexys, this venture onto Ondo Chain goes beyond a mere technical test. It demonstrates JPMorgan’s commitment to expanding its infrastructure to tokenize real assets (RWA) on networks compliant with institutional standards.
By securely connecting our payment solutions to public and private blockchains, we pave the way for faster, more reliable, and most importantly scalable settlements.
Nelli Zaltsman, Head of Settlement Solutions at Kinexys
A Direct Response to a $900 Billion Issue
The promise is clear: automate and secure a process still plagued by fragmented banking systems. According to JPMorgan’s data, settlement failures have cost the market over $900 billion in the past decade. Through blockchain, the DvP model can finally be executed seamlessly, without delays, and without outdated intermediaries.
Meanwhile, Kinexys continues to strengthen with the recent addition of support for accounts denominated in pounds sterling, another strong signal of JPMorgan’s global ambitions in the realm of blockchain payments.
